U.S. annuity issuers continued to face mixed conditions in the third quarter, with sales increasing for some issuers for some products but falling for others.
Many of the issuers are reporting higher overall earnings. Most of the issuers that break out earnings for their annuity units are reporting higher earnings for their annuity units. But at least two said they took charges related to reviews of actuarial assumptions for their life and annuity products.
Here’s a look at some of the details.
American Equity Investment Life Holding Co.
The West Des Moines, Iowa-based company is reporting $169 million in net income for the third quarter on $1.2 billion in revenue, up from $57 million in net income on $906 million in revenue for the third quarter of 2017.
Spending on “amortization of deferred sales inducements” increased to $55 million, from $15 million.
The change in the fair value of derivatives increased to $595 million, from $363 million.
Here’s what happened to deposits for major types of annuities between the third quarter of 2017 and the latest quarter:
- Index: Increased to $995 million, from $872 million.
- Multi-Year Fixed Rate: Increased to $35 million, from $16 million.
- Single-Premium Immediate: Decreased to $5 million, from $6.5 million.
American International Group Inc.
The New York-based company is reporting a $1.3 billion net loss for the third quarter on $11.5 billion in revenue, compared with a $1.7 billion net loss on $11.8 billion in revenue for the third quarter of 2017.
The overall loss was due to catastrophe-related losses at the company’s property and casualty unit.
AIG’s life and retirement unit is reporting $713 million in adjusted pre-tax income on $3.1 billion in revenue, compared with $1.2 billion in adjusted pre-tax income on $4.1 billion in revenue for the year-earlier quarter.
Results for the latest quarter include the effects of a $98 million actuarial update.
During a conference call with securities analysts, AIG executives said the actuarial review led to changes in factors such as variable annuity withdrawal assumptions, reserves for older universal life policies, and life insurance interest crediting estimates.
The individual retirement unit, which is part of the life and retirement unit, is reporting $393 million in pre-tax income on $1.3 billion in revenue, compared with $718 million in pre-tax income on $1.3 billion in revenue.
Here are how net flows of cash looked for major types of annuities.
- Index: Inflows increased to $1 billion, from $508 million in the year-earlier quarter.
- Fixed: Outflow fell to $410 million, from $694 million.
- Variable: Outflows increased to $776 million, from $231 million.
Athene Holding Ltd.
The Pembroke, Bermuda-based company is reporting $640 million in net income for the third quarter on $2.6 billion in revenue, up from $274 million in net income on $1.5 billion in revenue for the year-earlier quarter.
The company completed the acquisition of a large annuity business from Voya Inc. in the second quarter.