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Weiss Ratings, a Jupiter, Fla.-based independent rating agency of U.S. insurance companies and financial institutions, found that profits at the 20 largest life and annuity insurers in the U.S. decreased by 84% in 2011, going from $14.8 billion to $2.4 billion.

Those 20 companies account for 54% of the industry’s assets, but generated only 12.8% of its net income in 2011. Overall the industry earned $18.6 billion last year, down 38.2% from $30.1 billion in 2010, reports Weiss Ratings.

In a statement announcing the results, Gavin Magor, senior financial analyst at Weiss Ratings, said that while the declines may seem “dramatic,” the drops do not put the companies at risk of failure. “Much of the decline is attributable to the companies paying out more annuity withdrawal benefits and adding to reserves at a time when contract holders are taking increasingly greater advantage of such benefits,” he states.

Of the 20 largest insurers, 17 booked declines. However, three top insurers registered substantial gains and improved performance. Hartford Life Insurance Co. reported a 50% increase in earnings, from $122.5 million to $184.2 million in 2011. Axa Equitable Life Insurance turned around a loss of $510 million in 2010 to a profit of $967 million last year. Teachers Insurance and Annuity Association of America saw profits jump from $1.4 billion in 2010 to $2.4 billion in 2011, a 71% increase.

Insurers with the greatest declines were John Hancock (a profit of $103.8 million in 2010 to a loss of nearly $2.9 billion in 2011) and Transamerica (a 2010 profit of $417.7 million dipped to a loss of nearly $2.5 billion last year).

According to Weiss Ratings, the remaining 768 insurers it researched posted a 6.3% hike in net income during 2011, reaping $16.3 billion in profits in 2011 versus $15.3 billion in 2010. These companies now represent 87% of the industry’s total net income compared to 51% one year ago.