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August 07, 2009 at 08:00 PM
Life and health insurers and distributors that reported second-quarter earnings this week came in with a wide range of results.
American International Group Inc., New York
2 Q 2009 Results
NET INCOME: $1.8 billion
TOTAL OTHER-THAN-TEMPORARY IMPAIRMENT LOSSES ON AVAILABLE-FOR-SALE SECURITIES: $1.1 billion
REVENUE: $30 billion
2 Q 2008 Results
NET INCOME: $5.4 billion loss
TOTAL OTHER-THAN-TEMPORARY IMPAIRMENT LOSSES ON AVAILABLE-FOR-SALE SECURITIES: $6.7 billion
REVENUE: $20 billion
– AIG kept $360 million in impairment losss out of net income and put it in “other comprehensive income.”
– The company has paid or incurred liabilities to pay a total of $169 million in severance pay since it began to restructure.
– Domestic life premium fell just 5%, to $590 million, but domestic retirement premium revenue fell 24%, to $574 million, and net cash from all operating activities fell to $8 billion, from $16 billion. Sales of domestic individual fixed annuities fell 22%, to $199 million, but home service fixed annuity sales increased 3%, to $41 million.
– Annuity surrenders have stabilized, but “certain bank and broker-dealer distributors continued to place restrictions on new sales,” AIG says.
Prudential Financial Inc., Newark, N.J.
2 Q 2009 Results
CONSOLIDATED NET INCOME: $163 million
FINANCIAL SERVICES NET INCOME: $538 million
NET INVESTMENT CHANGE: $3.8 billion loss
REVENUE: $7.7 billion
FINANCIAL SERVICES REVENUE: $6.3 billion
2 Q 2008 Results
CONSOLIDATED NET INCOME: $581 million
FINANCIAL SERVICES NET INCOME: $566 million
NET INVESTMENT CHANGE: $357 million loss
REVENUE: $7.7 billion
FINANCIAL SERVICES REVENUE: $6.9 billion
- Variable annuity and individual life sales and flows of cash were strong.
– Claims experience was favorable at the individual life, group life and group disability operations.
– Prudential says it will finish exercising a contract provision that permits it to “put” its stake in the Wachovia Securities joint venture to Wells Fargo and Company, San Francisco, by Jan. 1, 2010.
Principal Financial Group Inc., Des Moines, Iowa
2 Q 2009 Results
NET INCOME: $150 million
TOTAL OTHER-THAN-TEMPORARY IMPAIRMENT LOSSES ON AVAILABLE-FOR-SALE SECURITIES: $201 million
REVENUE: $2.2 billion
2 Q 2008 Results
NET INCOME: $168 million
TOTAL OTHER-THAN-TEMPORARY IMPAIRMENT LOSSES ON AVAILABLE-FOR-SALE SECURITIES: $46 million
REVENUE: $2.7 billion
- Principal kept about $66 million in impairment losss out of net income and put it in “other comprehensive income.”
– The company rised $1.9 billion in capital through stock and debt issues during the quarter.
– The company sees rising unemployment reducing the number of participants in existing employee benefit plans.
– Dental claims were higher than expected.
Protective Life Corp., Birmingham, Ala.
2 Q 2009 Results
NET INCOME: $91 million
OTHER-THAN-TEMPORARY IMPAIRMENT LOSSES: $49 million
REVENUE: $785 million
2 Q 2008 Results
NET INCOME: $38 million
OTHER-THAN-TEMPORARY IMPAIRMENT LOSSES: $80 million
REVENUE: $695 million
- Protective kept about $7.9 million in impairment losss out of net income and put in “other comprehensive income.”
- Annuity sales increased 57%, to $610 million.
– Sales of stable value products fell to none, from $588 million.
– Protective Chairman John Johns notes that carrying $1.5 billion in excess liquidity at the operating companies is a drag on earnings.
– Protective Life wants to take “advantage of disruptions in the marketplace to recruit talent and expand the depth and breadth of our distributor relationships, especially with respect to our universal life and annuity product lines,” Johns says.
The Phoenix Companies Inc., Hartford
2 Q 2009 Results
NET INCOME: $111 million loss
NET INVESTMENT CHANGE: $86 million loss
REVENUE: $440 million
2 Q 2008 Results
NET INCOME: $6.2 million
NET INVESTMENT CHANGE: $26 million loss
REVENUE: $566 million
– “During the first quarter, a number of the company’s distributors slowed or stopped selling the company’s products largely due to downgrades of Phoenix by rating agencies, and sales declines in the quarter reflect these actions,” Phoenix says. “The company is working to develop new relationships with an expanded range of distributors, including independent marketing organizations.”
FBL Financial Group Inc., West Des Moines, Iowa
2 Q 2009 Results
NET INCOME: $24 million
DERIVATIVES INCOME AND CAPITAL GAINS: $51 million gain
NET INVESTMENT IMPAIRMENT: $27 million loss
REVENUE: $304 million
2 Q 2008 Results
NET INCOME: $17 million
DERIVATIVES INCOME AND CAPITAL GAINS: $28 million loss
NET INVESTMENT IMPAIRMENT: $78 million loss
REVENUE: $145 million
– Premiums from the EquiTrust Life independent distribution channel fell to $199 million, from $538 million, because of product portfolio and crediting rate changes made to preserve capital.
American Equity Investment Life Holding Company, West Des Moines, Iowa
2 Q 2009 Results
NET INCOME: $9 million
CHANGE IN FAIR VALUE OF DERIVATIVES: $30 million gain
