Most of the insurers and reinsurers that released earnings this week reported profits, but layoffs at client employers affected the health insurers and other companies with employee benefits operations.
MetLife Inc., New York (NYSE:LNC)
3 Q 2009 Results
NET RESULTS: $620 million loss
NET REALIZED INVESTMENT CHANGE: $650 million loss
NET REALIZED INVESTMENT CHANGE REPORTED IN "OTHER COMPREHENSIVE INCOME": $245 million
REVENUE: $6.6 billion
3 Q 2008 Results
NET RESULTS: $630 million net income
NET REALIZED INVESTMENT CHANGE: $748 million loss
NET REALIZED INVESTMENT CHANGE REPORTED IN "OTHER COMPREHENSIVE INCOME: 0
REVENUE: $6.8 billion
– Operating earnings, which exclude the investment swings, increased to $718 million, from $608 million in the third quarter of 2008.
– "Growth in the dental business drove a 3% increase in the non-medical health and other premiums," and group life revenue increased 2%.
– Total individual life first-year premiums and deposits amounted to $255 million, down from $258 million. Sales of variable and universal life were down, but sales of traditional life increased 50%.
– Total individual annuity deposits fell to $4 billion, from $4.3 billion, with annuity lapse rates dropping for the third consecutive quarter, and annuity net flows staying positive for the sixth consecutive quarter.
– MetLife says derivatives contracts that buffered it against some of the financial pain that competitors faced during the worst months of the crisis now are doing worse because overall conditions are improving. "MetLife uses derivatives – in connection with its broader portfolio management efforts – to hedge a number of risks, including changes in interest rates and foreign currencies," the company says. "During the [latest quarter, an improvement in MetLife's own credit spread, which impacts the valuation of certain insurance liabilities, contributed approximately $582 million, after income tax, to the derivative losses. This reverses derivative gains that occurred in earlier quarters when the credit spread widened."
Lincoln National Corp., Radnor, Pa. (NYSE:LNC)
3 Q 2009 Results
NET INCOME: $153 million
NET REALIZED INVESTMENT CHANGE: $2.3 million loss
REVENUE: $2.1 billion
3 Q 2008 Results
NET INCOME: $148 million
NET REALIZED INVESTMENT CHANGE: $42 million loss
REVENUE: $2.3 billion
– Operating income fell to $276 million, from $298 million.
– Group protection income increased to $35 million, from $27 million, and the non-medical loss ratio was just 68%. Group disability and group life claims were lower than expected.
– Although group protection net earned premiums were up 2%, the total "reflected lower premium persistency due to workforce and wage reductions within small businesses," Lincoln says.
– Annualized voluntary benefits sales increased 17%, to $80 million.
– Individual life sales fell to $146 million, from $190 million, but term life products and the MoneyGuard product, which links universal life insurance with a long term care rider, performed well.
– Individual variable annuity deposits and net cash flows were down, but fixed and indexed annuity product deposits totaled $1.3 billion and were about twice as high as they were in the third-quarter of 2008.
Genworth Financial Inc., Richmond, Va. (NYSE:GNW)
3 Q 2009 Results
NET INCOME: $45 million
NET REALIZED INVESTMENT CHANGE: $122 million loss
REVENUE: $1.5 billion
3 Q 2008 Results
NET INCOME: $258 million loss
NET REALIZED INVESTMENT CHANGE: $816 million loss
REVENUE: $1.7 billion
– "We are encouraged by the multiple signs of stabilization and improvement in our served markets," Genworth Chairman Michael Fraizer says.
– Long term care insurance sales fell to $53 million, from $64 million in the third quarter of 2008, and life insurance sales fell to $50 million, from $76 million.
– Net flows into wealth management products increased to $468 million, from $183 million.
Reinsurance Group of America Inc., Chesterfield, Mo. (NYSE:RGA)
3 Q 2009 Results
NET INCOME: $118 million
NET REALIZED INVESTMENT CHANGE: $17 million loss
NET REALIZED INVESTMENT CHANGE REPORTED IN "OTHER COMPREHENSIVE INCOME": $4 million transferred to revenue
REVENUE: $1.8 billion
3 Q 2008 Results
NET INCOME: $25 million
NET REALIZED INVESTMENT CHANGE: $92 million loss
NET REALIZED INVESTMENT CHANGE REPORTED IN "OTHER COMPREHENSIVE INCOME: 0
REVENUE: $1.3 billion
-U.S. traditional sub-segment pre-tax income increased to $64 million, from $11 million, but claim levels were somewhat higher to a number of claims on policies with death benefits greater than $1 million incurred during the quarter.
Aflac Inc., Columbus, Ga. (NYSE:AFL)
3 Q 2009 Results
NET INCOME: $363 million
NET REALIZED INVESTMENT CHANGE: $226 million loss
REVENUE: $4.5 billion
3 Q 2008 Results
NET INCOME: $100 million
NET REALIZED INVESTMENT CHANGE: $389 million loss
REVENUE: $3.7 billion