The U.S. life insurance industry did fine in 2005, and it should continue to do fine this year.
Analysts at Moody’s Investors Service, New York, present that assessment of the life industry in a new report that explains the firm’s decision to maintain a stable outlook for the industry as a whole.
Revenue, net income, general account assets and separate account assets all are rising, and those increases are helping the life industry keep the average insurance financial strength rating at A1, the analysts write.
“We expect to see a continued trend in solid performance,” says Laura Bazer, a Moody’s vice president who helped write the report.
The pace of improvement will slow, but mainly because of tough comparisons with the gains that followed the 2001-2002 bear market, Bazer says.
Here are some of the forces that Moody’s analysts say are shaping the U.S. life industry:
- Efforts by the National Association of Insurance Commissioners, Kansas City, Mo., to develop new reserving requirements for variable products with secondary guarantees.
- Management of variable annuity living benefit and death benefit guarantees.