The Good News In 2000? More Pluses Than Minuses
By Jim Connolly
In what amounts to good news for the industry, readers combing through statistical results for 2000 will be marking off more pluses than minuses if they compare the numbers with 1999′s totals. Click Here to see the full report!!! (Viewable in Adobe Acrobat)
Overall, the top 25 companies in each category saw their totals grow in 2000 over 1999 despite a year of concerns that went to the very heart of the industry. Those concerns included the impact of the Gramm-Leach-Bliley Act of 1999 and insurers’ place in the new financial services world.
But from one year to the next, one thing seems to be certain with these statistical results–companies like Prudential Insurance Company of America, Metropolitan Life Insurance Company, Teachers Insurance and Annuity Association of America, and other leaders, continue to head up the pack.
Data is based on information reported to the National Association of Insurance Commissioners in Kansas City, Mo., for 2000.
All in all, 15 of the top 25 insurers in the admitted assets category posted increases, including Prudential’s $4.52 billion increase.
While Met Life saw admitted assets drop to $181.3 billion from $183.9 billion, TIAA’s assets increased to $118.6 billion from 1999′s $110.5 billion.
Met Life’s John Nadel, assistant vice president of investor relations in New York, says the market’s reduction of separate account assets balances has impacted admitted assets totals for Met Life as well as other companies. For instance, Equitable Life (N.Y.) and IDS Life Insurance Company saw totals drop by $5 billion and just over $4 billion, respectively.
But Northwestern Mutual Life Insurance Company experienced a gain of approximately $6 billion.
Other companies that moved up in the pack include Jefferson-Pilot Financial Insurance Company, Golden American Life Insurance Company, Travelers Life & Annuity, and Security Life of Denver Insurance Company.
For the most part, premium income among the top 25 insurers grew in 2000. Twenty-two of the top 25 insurers experienced increases in this category.
Met Life retained its number one spot, although its total declined to $23.5 billion from $24.6 billion. Nadel explains that when Met Life demutualized, it established a closed block of participating life insurance policies as a step toward demutualization. That amount, in excess of $1 billion, was reinsured, reducing the premium total in 2000, he says.
Nationwide Life Insurance moved into the number two spot with its $3.3 billion increase over 1999′s total. Allstate Life Insurance Company grew $3.2 billion.
Hartford Life Insurance Company bounded to 6th place from number 20 with premium income growing to $11.5 billion in 2000 from $6.4 billion in 1999.
Robert Piatkowski, a financial analyst with Hartford Life in Simsbury, Conn., says that a $3 billion COLI sale in the individual and group life areas pushed up the total as well as a modco reinsurance arrangement that resulted in less premium being ceded. A modco arrangement also resulted in the growth of annuity premium.
In general, according to Piatkowski, sales have been augmented by the growth in VA products and the bank distribution channel.
Nineteen of the top 25 companies reporting individual life premiums experienced growth in 2000 compared with 1999. Of those 25, six had growth or declines that were near previous levels and could be described as flat.
Northwestern Mutual Life Insurance Company remained in first place, growing by $542.7 million to $7.3 billion.
Reassure America Life Insurance Company leap-frogged to fourth place with a total of $3.75 billion in 2000 compared with 1999′s $81.5 million.
And Hartford Life’s total grew to $2.49 billion from $189 million in 1999.
The company also grew in the annuity premium category, placing number one with $5.17 billion compared with a 1999 total of $3.28 billion.
In fact, 23 of the 25 top companies in the annuity premiums category experienced increases, with several handsome jumps.
IDS Life saw premiums grow to $3.95 billion in 2000 from $2.77 billion in 1999. Allstate Life Insurance Company had a $3.8 billion total, up from $2.5 billion in 1999, while Travelers Life & Annuity had $3.29 billion in annuity premium compared with $2.3 billion in 1999.
Equitable Life Insurance Company of Iowa reported annuity premiums in 2000 totaling $1.3 billion compared with $370.6 million in 1999. RGA Reinsurance Company reported a little over $1 billion in annuity premium in 2000 compared with $19.8 million in 1999.
Nationwide Life’s annuity premiums grew to $4.96 billion from $3.88 billion. Eric Henderson, a variable annuity product officer, attributes this at least in part to the addition of a bonus rider to one of the Columbus, Ohio-based company’s variable annuities. The addition was accompanied by new sales literature, additional wholesalers and new fund choices. While all of the pieces are very important, “relationships are a large part of the game,” he adds.
Group life business, an area that insurers such as Metropolitan Life Insurance Company see as a growth area, showed strong growth in 2000. Sixteen of the top 25 companies in this category witnessed increases in group life premium over 1999.
Metropolitan Life led this group with $5 billion in premium compared with $4.38 billion in the previous year. Met Life’s Nadel says the increase can be attributed to two factors. The company sees opportunity in this market and made it a focus, building on relationships with institutional clients, he says.
When Met Life demutualized, Nadel explains, some corporate customers were eligible to receive stock but chose cash instead. Some of those customers took the cash and prepaid premiums increasing the total for 2000, he adds.
Prudential’s $829 million increase in group life premium brought its total to $3 billion in 2000 and earned it a number two spot in this category’s rankings.
In its S-1 filing with the Securities and Exchange Commission, Prudential stated that group insurance revenues grew to $2.8 billion in 2000, up from $2.4 billion in 1999. Revenues from international insurance also grew to $1.9 billion from $1.5 billion during the same period.
Sun Life Assurance Company of Canada’s group life premium totals also grew substantially, moving the insurer to 5th place with $841.2 million in premiums in 2000 compared with $195.4 million in 1999.
Northwestern Mutual maintained its lead position in in-force individual life totals, growing to $633.3 billion in 2000 from $582.7 billion in 1999.
Life Reassurance Corp. of America moved into the 4th spot up from 15th place with total in-force individual life growing to $565.7 billion from 1999′s $232.8 billion.
Munich American Reassurance Company also significantly moved up the charts to 14th place with a $304.8 billion total compared to $109.3 billion that garnered it a number 31 spot in 1999.
Growth in in-force life totals was accompanied by in-force group life increases. Seventeen of the category’s top 25 companies grew in 2000, with Met Life and Prudential heading up the pack as they did in the in-force total category.
All in all, 22 of 25 of the leads in this category experienced growth in 2000. In particular, Life Reassurance Corp. of America saw its total grow to $605.2 billion in 2000 from $114.4 billion in 1999, an increase that placed it 6th in the category.
In the category covering all health insurers, American Family Life Assurance Company of Columbus and United Healthcare Insurance Company retained their respective number one and two spots. Premiums less dividends for these two companies were a respective $7.4 billion and $6 billion, compared with $6.6 billion and $5.7 billion in 1999. AFLAC’s incurred claims also increased by $541 million, less than the $870 million growth in premiums. United Healthcare’s incurred claims grew by $371 million more than its $323 million growth in premiums.
As in 1999, United Healthcare and Connecticut General Life Insurance Company ranked number 1 and 2 in the group health premium category. Premiums less dividends grew at respective totals of $322 million and $464 million, compared with respective claims totals of $352 million and $286 million.
And in the individual health leaders category, AFLAC and American Life Insurance Company led the list again. AFLAC witnessed a growth in premiums of $870 million and an increase in claims equal to $540 million. American Life saw premiums grow by $140 million compared with an increase in claims totaling $54 million.
Reproduced from National Underwriter Life & Health/Financial Services Edition, August 6, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.