A trio of insurers released earnings with all reporting a strong turnaround over last year’s dismal showing.
Principal Financial Group, the insurer and asset manager, posted Monday, May 3, a 69% surge in first-quarter profit, as its asset accumulation business showed substantial growth. The company earned $190.8 million, or 59 cents a share, compared with $112.8 million, or 43 cents a share a year ago.
Principal has suffered huge losses as the markets collapsed, forcing the company to raise its cash holdings that led to lower yields on investments.
A big driver of Principal’s success was the operating profit at its U.S. asset accumulation segment, which rose to $157 million for the latest quarter, from $93.1 million in the year-ago period.
Assets under management (AUM) rose 24% to $293.4 billion, compared to $236.6 billion in the first quarter of 2009.
“We see clear signs the economy is starting to recover,” Principal CEO Larry D. Zimpleman said. “As this has occurred, our three largest U.S. accumulation businesses have delivered meaningful sequential improvement in sales, with $4.3 billion in total for the first quarter, generating more than $900 million of positive net cash flows. While we see improving trends, small and medium businesses continue to proceed with caution, and our sales remain below 2007 levels.”
There were also robust sales of the company’s three key U.S. retirement and investment products in the first quarter, despite a difficult sales environment, with $1.7 billion for Full Service Accumulation, $2.1 billion for Principal Funds and $500 million for Individual Annuities.
Genworth Profits Jump
On Thursday, April 29, Genworth Financial reported a better-than-expected first quarter, as profits rose on stronger revenue and net flows continued to bulge its assets under management (AUM).
The insurer saw profit rise to $178 million or 36 cents a share, compared with last year’s first-quarter loss of $469 million or $1.08 a share. Analysts had forecast earnings of 27 cents a share, according to Thomson Reuters.
Revenue increased 40% year over year to $2.42 billion. The company reported a drop in net investment losses to $42 million, down from $54 million in the prior quarter and $483 million in the year-ago quarter. Its unrealized investment losses also improved in the quarter. Net unrealized investment losses declined to $900 million from $1.4 billion in the prior quarter and $4.1 billion in the prior-year quarter.