Low interest rates may have hurt the performance of life insurers’ long-term care insurance (LTCI) units more than the performance of other interest-sensitive operations.
Analysts at Moody’s Investors Service say charges for increasing LTCI reserves led to a drop in total U.S. life company operating earnings. The companies’ earnings fell to $27 billion in 2014, down 4 percent from the 2013 total, the analysts say.
The companies’ total annual net income rose 31 percent, to $23 billion.
Increases in fee income, stock-based account values and prepayments helped net income by pushing investment income higher.