NU Online News Service, May 4, 2004, 2:04 p.m. EDT – An increase in life marketing earnings boosted first-quarter profits at Protective Life Corp., Birmingham, Ala.[@@]
The life insurer is reporting $55.2 million in net income for the latest quarter on $518.2 million in revenue, up from $37.7 million in net income on $474.6 million in revenue for the first quarter of 2003.
Low interest rates and ferocious competition hurt fixed annuity sales, but a new program that markets notes backed by Protective Life funding agreements to retail investors generated $222 million in sales, Protective says.
A funding agreement is a contract that calls for an insurer to pay investors a specified fixed or floating rate of return.
Investors think of funding agreements and notes backed by funding agreements as stable-value investments that offer a relatively high rate of return, according to Moody’s Investors Service, New York.