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Life Health > Life Insurance

UBS Expert Says 4Q Life Earnings Were Healthy

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NU Online News Service, Jan. 12, 2005, 4:33 p.m. EST

A life insurance industry analyst predicts life insurer profits for the fourth quarter of 2004 will be slightly higher than expected.[@@]

Results should be better because stock prices were up in the fourth quarter and mortality trends were favorable, according to Andrew Kligerman, a securities analyst with UBS Securities L.L.C., New York.

The increase in stock prices gave a lift to life insurers’ asset-based fee income and net flows from variable products, Kligerman writes in a research note.

Kligerman expects slower variable annuity sales, however, because of the customary lag between VA sales and the equity markets. Net new VA sales fell to $4 billion in October and November, down from $7 billion for the comparable period in 2003, because of a drop in new VA sales, Kligerman reports.

One relatively new VA option, the guaranteed minimum withdrawal benefit, has enjoyed growing popularity, Kligerman observes.


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