Reflecting non-economic accounting volatility and one-time gains, net income of U.S. publicly traded life insurers increased by 7 percent in the third quarter of 2014 compared to the prior-year quarter, according to a new report from Moody’s Investors Service.

Despite the increases in net income, the report shows, operating income for the group declined by 3 percent year-over-year. The first year-over-year decline since Q3 2011, the dip was due mainly to “material charges” incurred by Genworth and Prudential in Q3 2014.

“These charges more than offset higher fee income and stronger alternative investment income for the industry,” the report states. “Mortality results were mixed in Q3 2014, with no discernible trend.”

The report also reveals these findings when comparing Q32014 results with that those of the year-ago period:

The Q3 2014 7 percent increase in net income to approximately $6.8 billion. The increase is due to large changes in non-economic accounting charges, one-time gains and to hedging gains as interest rates decreased slightly in Q3 2014 whereas in Q3 2013 interest rates increased.

Aggregate operating earnings declined 3 percent to $7.1 billion. Genworth’s long-term care (LTC) reserve strengthening and the impact of Prudential’s deferred acquisition costs (DACs) unlocking in its individual annuities segment more than offset greater fee income and higher alternative asset returns for the industry. Excluding Genworth, operating income for the remainder of the rated universe increased by a modest 3 percent year-over-year.

Interest rates were lower in Q3 2014 compared to Q3 2013. The lower year-over-year rates contributed to a 13 percent decline in fixed annuity sales in Q3 2014 relative to Q3 2013, while VA sales declined by 7 percent as industry players continued to de-emphasize VAs.

Individual life sales declined 9 percent in Q3 2014. Insurers continued to raise prices and shift to more capital-efficient products.

Share repurchases more than tripled in Q3 2014 from Q3 2013. MetLife resumed share repurchases in earnest in June 2014, buying back $438 million in the current quarter.

The infographics on the following page recap net and operating income for the surveyed companies.