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Life Health > Life Insurance

Scarred By The Meltdown

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Scars of the economic meltdown that started late in 2007 are evident in several of the categories in our annual life and health statistical report. (See the charts below.)

Yet, in what can be characterized as a trying year, the industry leaders continued to show strength and stability despite the ups and downs in certain categories.

One of the hardest-hit areas was in admitted assets where 22 out of the top 25 companies showed a decrease in totals in 2008 compared to 2007. The collapsing stock market took its toll here, battering the vast majority of the 50 largest companies.

Some of the biggest losers in sheer dollars were Axa Equitable, off $31 billion; Lincoln National, down some $25 billion; Principal Life, off $20 billion; Prudential, off some $15 billion; and American Life, down $15 billion.

Huge losses in separate account assets hit a number of these companies very hard with financial statements showing that Axa Equitable’s separate account assets were off by some $29 billion, while Lincoln’s were down by close to $26 billion.

A more positive picture comes in the total premium category where a couple of the Top 25 companies registered increases of 40% or more, while several others rose more than 25%.

New York Life Insurance & Annuity’s total premiums rose 46% in 2008 to $10.67 billion from $7.3 billion the year before, based on a large increase in its individual annuity premium income. For the same reason, Teachers Insurance & Annuity saw a 41.4% increase in total premiums, coming in at $13.38 billion last year, up from $9.46 billion in 2007.

At the top of the list, Metropolitan Life rang up a 29% increase in total premiums, while at #9 Aetna Life moved ahead by some 27%.

On the down side, some companies that hit well-publicized rough spots saw substantial decreases in premium income. Among these was Hartford Life, off some 42.7%.

In the net investment income category, 11 companies in the top 25 saw decreases, while 14 registered increases over the previous year.

Thirty-six companies had over $1 billion in net investment income in 2008. Five companies that had reached that level in 2007 fell below it in 2008: UNUM Life, Om Financial Life, Reassure American Life, ING USA Annuity and Life, and Genworth Life & Annuity.

The one newcomer to the billion-dollar circle was Prudential Retirement Insurance & Annuity.

The net gain after dividends category often shows substantial swings–in either direction–from one year to the next among the top companies in the industry. Results for 2008 were no exception with 17 of the top 25 companies registering decreases, while only 8 showed gains over the previous year.

At #25, CUNA Mutual Insurance Society recorded the biggest percentage gain in the top 25 at 396%, moving from $50.8 million in net gain after dividends in 2007 to $251.9 million in 2008. At #5, Northwestern Mutual climbed 199% to $1.16 billion in 2008.

The biggest loser in the top 25, both in sheer dollars and percentage-wise, was Metropolitan Life, which was off some 73% to $553 million from $2.07 billion the year before. A sister company, Met Life of Connecticut was off 30% in 2008.

In the individual life insurance premium category, American Life maintained its position at the top of the heap despite a 21% decrease in premium income to $20.3 billion.

The three big mutuals bunched right below American Life in this category all showed increases with Northwestern Mutual cracking $11 billion in individual life premium. New York Life and Massachusetts Mutual each showed a $100 million-plus rise over the year before.

Otherwise in the top 25 there were 9 companies that lost ground in 2008 in individual life premium from the previous year. The biggest loser, percentage-wise, was RGA Reinsurance, whose life premiums slid 28.7% to $1.195 billion.

In the individual annuity premium category, several companies that had been setting the sales pace for the industry in the last few years showed a dip in premium income, while others surged.

Lincoln National, Jackson National, Riversource, Hartford Life & Annuity, Allianz, Hartford Life and Axa Equitable all were among the 11 of the top 25 companies to show decreases in individual annuity premium.

Lincoln National did, however, maintain its grip on the top spot despite its 12.4% slide. It was ahead of second-place New York Life Insurance & Annuity by about $2.36 billion in annuity premium.

All told, 50 companies in this category had premium income of over $1 billion in 2008, up from 43 companies in 2007.

The biggest gainer, percentage-wise, in the top 50 was Western National, which rose 327% to $5.7 billion from $1.34 billion in 2007.

Aviva Life & Annuity was another big gainer, moving up some 85.6%, to $3.03 billion in individual annuity premium.

The companies in second and third place, New York Life Insurance & Annuity and Teachers Insurance & Annuity, were up 62.7% and 46%, respectively, to $9.26 billion and $9.13 billion.

The group life premium category saw only 5 companies with totals over $1 billion compared to 8 companies in 2007.

At the top of the list, Metropolitan Life maintained its grip with more than twice the group life premium of second-place Prudential. Nonetheless, both of these companies were off substantially here, with Met Life’s group life premium about $1 billion lower than it was in 2007.

Hartford Life, which in 2007 had moved up to second place based on a $4.3 billion increase in group life premium, swung in the opposite direction last year and dropped to spot # 33, shedding some $5 billion of group life premium income.

In any case, 17 of the top 25 companies registered group life premium increases in 2008. Near the top of the list at #3 and #6 were Minnesota Life and Life Insurance Company of North America, which respectively had increases of 11.3% and 16.2% over 2007.

Total life insurance in-force was, as usual, a pretty stable category with only 4 companies showing declines among the top 25 on the list.

One notable milestone here was that Metropolitan Life, long the industry leader in this category, passed the $3 trillion in-force milestone last year, increasing its in-force business by an astounding $550 million in one year.

Transamerica Life’s in-force total grew dramatically as the operations of Transamerica Occidental were folded into it. Transamerica Occidental had ranked #7 in 2007 with some $940 billion of life insurance in-force.

Among the top 25 in this category the company with the largest percentage decrease was Scottish Re US, which was off about 38%.

Metropolitan Life and Prudential sit atop the group life insurance in-force category at #1 and #2, respectively. Metropolitan’s group in-force rose 14.7% in 2008, while Pru was essentially flat year over year.

Other large gainers in the top 25 were Hartford Life & Accident, Minnesota Life, US Business of Canada Life Assurance and ING USA Annuity and Life.

Two reinsurers–RGA Reinsurance and Swiss Re Life & Health America–sit at the top of the individual life insurance in-force category.

This is a sector in which only 5 of the top 25 companies showed decreases in 2008 from the previous year.

Transamerica Life joined the billion-dollar club here based on the addition of Transamerica Occidental’s individual in-force to its total.

The other member of the billion-dollar club was Northwestern Mutual, which had a $60 billion increase in individual life insurance in-force in 2008.


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