Earnings: AIG, Prudential, Others

Black ink dominated the income statements of the life insurers, health insurers and distributors that announced their earnings this week.

American International Group Inc., New York (NYSE:AIG)
3 Q 2009 Results
NET INCOME: $15 million loss
LIFE AND RETIREMENT OPERATING INCOME: $1.3 billion
TOTAL NET REALIZED CAPITAL CHANGE: $2.9 billion loss
OTHER THAN TEMPORARY INVESTMENT LOSSES ON AVAILABLE FOR SALE FIXED MATURITY SECURITIES REPORTED IN “OTHER COMPREHENSIVE INCOME”: 11 million
TOTAL LIFE AND RETIREMENT REVENUES, EXCLUDING NET REALIZED CAPITAL CHANGE: $14 billion
REVENUE: $26 billion
3 Q 2008 Results
NET INCOME: $25 billion loss
LIFE AND RETIREMENT OPERATING INCOME: $15 billion loss
NET REALIZED INVESTMENT CHANGE: $18 billion loss
OTHER THAN TEMPORARY INVESTMENT LOSSES ON AVAILABLE FOR SALE FIXED MATURITY SECURITIES REPORTED IN “OTHER COMPREHENSIVE INCOME”: 0
TOTAL LIFE AND RETIREMENT REVENUES, EXCLUDING NET REALIZED CAPITAL CHANGE: $12 billion
REVENUE: $898 million
– “Net realized capital losses were significantly lower than the third quarter of 2008 and continued to be lower than in the past several quarters due to improving market conditions and the adoption of new accounting pronouncements during the second quarter,” AIG says..
– Domestic life and retirement remiums, deposits, and other considerations were down 38% “as a result of ratings downgrades and the effects of negative AIG publicity during the past year,” but they were up 10% from the second quarter. Fixed annuity and group retirement deposits are improving, and so are investment results, the company reports.

Prudential Financial Inc., Newark, N.J. (NYSE:PRU)
3 Q 2009 Results
NET INCOME: $1.1 billion
NET REALIZED INVESTMENT CHANGE: $2.3 million loss
NET REALIZED INVESTMENT CHANGE REPORTED IN “OTHER COMPREHENSIVE INCOME”: 0
REVENUE: $8.6 billion
3 Q 2008 Results
NET INCOME: $176 million loss
NET REALIZED INVESTMENT CHANGE: $42 million loss
NET REALIZED INVESTMENT CHANGE REPORTED IN “OTHER COMPREHENSIVE INCOME”: 0
REVENUE: $7 billion
– Earnings include a $211 million pretax benefit for a release of reserves associated with individual annuity guaranteed minimum death and income benefits, and to reduce amortization of deferred policy acquisition and other costs.
– Prudential also took a pretax charge of $140 million in connection with individual annuities for “mark to market of hedging positions initiated in 2009 to mitigate exposure to declines in capital from adverse financial market conditions.”
– Net individual annuity sales increased to $4.4 billion, from $481 million in the third quarter of 2008.
– Individual life annualized new business premiums have increased to $86 million, from $82 million. Group new business premiums fell to $110 million, from $117 million.

Hartford Financial Services Group Inc., Hartford (NYSE:HIG)
3 Q 2009 Results
NET INCOME: $2.6 billion loss
TOTAL NET REALIZED CAPITAL CHANGE: $1.2 billion loss
OTHER THAN TEMPORARY INVESTMENT LOSSES REPORTED IN “OTHER COMPREHENSIVE INCOME”: $224 million
REVENUE: $5.2 billion
3 Q 2008 Results
NET INCOME: $220 million loss
TOTAL NET REALIZED CAPITAL CHANGE: $3.4 billion loss
OTHER THAN TEMPORARY INVESTMENT LOSSES REPORTED IN “OTHER COMPREHENSIVE INCOME”: 0
REVENUE: Negative $393 million
– Fully insured group benefits sales fell to $122 million, from $158 million in the third quarter of 2008, “largely due to the economic and competitive environment,” Hartford says.
-Fully insured benefits premiums fell 4%, to $1.1 billion. “The decrease was primarily related to the effects of the economic downturn, including lower payrolls, while persistency remained high.”.
– The retirement plan asset total stood at about $43 billion Sept. 30, about where it was a year earlier, but up sharply from $39 billion June 30. Deposits fell to $1.8 billion, from $2.3 billion in the third quarter of 2008.

Principal Financial Group Inc., Des Moines, Iowa (NYSE:PFG)
3 Q 2009 Results
NET INCOME: $204 million
NET REALIZED INVESTMENT CHANGE, EXCLUDING LOSSES ON AVAILABLE FOR SALE SECURITIES: $51 million gain
NET REALIZED INVESTMENT CHANGE REPORTED IN “OTHER COMPREHENSIVE INCOME”: $45 million
REVENUE: $2.3 billion
3 Q 2008 Results
NET INCOME: $109 million
NET REALIZED INVESTMENT CHANGE, EXCLUDING LOSSES ON AVAILABLE FOR SALE SECURITIES: $21 million loss
NET REALIZED INVESTMENT CHANGE REPORTED IN “OTHER COMPREHENSIVE INCOME”: 0
REVENUE: $2.5 billion
– Health and specialty benefits result “reflect a reduction in the number of employees in existing plans.”

Ameriprise Financial Inc., Minneapolis (NYSE:AMP)
3 Q 2009 Results
NET INCOME: $260 million
NET REALIZED INVESTMENT CHANGE: $542 million gain
REVENUE: $2 billion
3 Q 2008 Results
NET INCOME: $70 million loss
NET REALIZED INVESTMENT CHANGE: $62 million gain
REVENUE: $1.6 billion
– The annuities segment generated $268 million in pretax income, up from a pretax loss of $34 million for the third quarter of 2008.
– Principal attracted about $500 million in variable annuity net inflows.
– The number of advisors increased 8%, to 12,314.

Allstate Corp., Northbrook, Ill. (NYSE:ALL)
3 Q 2009 Results
NET INCOME: $221 million
TOTAL OTHER-THAN-TEMPORARY IMPAIRMENT LOSSES: $539 million loss
NET REALIZED INVESTMENT CHANGE REPORTED IN “OTHER COMPREHENSIVE INCOME”: $147 million
LIFE PREMIUMS AND CONTRACT CHARGES: $482 million
REVENUE: $7.3 billion
3 Q 2008 Results
NET INCOME: $923 million loss
TOTAL OTHER-THAN-TEMPORARY IMPAIRMENT LOSSES: $1.1 billion loss
NET REALIZED INVESTMENT CHANGE REPORTED IN “OTHER COMPREHENSIVE INCOME”: 0
LIFE PREMIUMS AND CONTRACT CHARGES: $468 million
REVENUE: $7.6 billion
– Allstate Financial unit premiums and deposits fell to $1 billion, from $1.9 billion in the third quarter of 2008. The drop resulted “from pricing actions to improve returns and reduce concentration in spread-based products.”
– Allstate Financial has cut costs by about $70 million.

American Equity Investment Life Holding Company, West Des Moines, Iowa (NYSE:AEL)
3 Q 2009 Results
NET INCOME: $3 million loss
CHANGE IN FAIR VALUE OF DERIVATIVES: $121 million gain
NET REALIZED INVESTMENT CHANGE REPORTED IN “OTHER COMPREHENSIVE INCOME”: $50 million
REVENUE: $343 million
3 Q 2008 Results
NET INCOME: $12 million loss
CHANGE IN FAIR VALUE OF DERIVATIVES: $84 million loss
NET REALIZED INVESTMENT CHANGE REPORTED IN “OTHER COMPREHENSIVE INCOME”: 0
REVENUE: $84 million
– Annuity sales increased to $980 million, up 71% from the total for the third quarter of 2008.

FBL Financial Group Inc., West Des Moines, Iowa (NYSE:FFG)
3 Q 2009
NET INCOME: $16 million
DERIVATIVE INCOME: $49 million gain
REVENUE: $308 million
3 Q 2008 Results
NET INCOME: $11 million
DERIVATIVE INCOME: $41 million loss
REVENUE: $190 million
– EquiTrust Life independent channel premiums fell to $47 million, from $496 million, “reflecting a variety of changes made earlier in 2009 in order to preserve capital.”
– The Farm Bureau Life channel increased traditional and universal life sales 4%.