US L/A insurance industry net income declines by more than 39%

Written by Adam Cadle

26/09/2023

Net income for the US life/annuity (L/A) insurance industry decreased by 39.5% in H1 2023, dropping to $13.2bn from $21.9bn in the same prior-year period, according to AM Best.

The drop in net income was driven partly by $9.4bn in net realised capital losses. Total income in the L/A industry rose 11.6% to $528.9bn from the prior-year period, driven by a 13.8% increase in premiums and annuity considerations and a 3.9% increase in net investment income. A resulting pretax net operating gain of $29.6bn reflected an 18.8% increase from the prior year period.

Capital and surplus declined slightly from the end of 2022 to $480.7bn, as $22.7bn of net income, change in unrealised gains, contributed capital, and other changes in surplus were reduced by $25bn, consisting of a change in asset valuation reserve and stockholder dividends.

This latest financial review is detailed in AM Best’s latest report entitled, First Look: Six-Month 2023 US Life/Annuity Financial Results, and the data is derived from companies’ six-month 2023 interim statutory statements that were received as of 7 September 2023, representing an estimated 98% of total industry premiums and annuity considerations.

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