US L/A insurers’ net income more than triples to $32.5bn

Written by Adam Cadle

08/04/2022

Publicly traded US life/annuity insurance companies saw a strong recovery in 2021, with net income more than tripling to $32.5bn from 2020, driven largely by a 13% boost in revenue, AM Best has said.

The industry saw a $35bn increase in revenue to $297.5bn in 2021, coming on the back of a modest increase in premiums, as well as increases in net investment income and realised gains.

Net investment income rose by roughly $11.9bn to $85.7bn. The persistent drag from the low interest rate environment continues to impact margins, but ongoing growth in general account invested assets, aided by premium growth and assets under management, has pushed investment income higher.

Investors continue to shift to indexed products from fixed-rate ones to seek protection from rising inflation. Traditional variable annuities experienced very strong growth, bolstered by favourable equity markets – while registered indexed-linked annuities continued the rapid growth of prior years.

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