How 6 Annuity Issuers Are Doing Now

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.

(Related: Genworth Reminds Analysts That GLIC Will Stand Alone)

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.

The company says expansion in the financial institutions channel and launches of new products helped it increase deposits from new retail annuity sales to $2.2 billion in the third quarter, from $1.3 billion in the year-earlier quarter.

Brighthouse Financial Inc.

The Charlotte, North Carolina-based company is reporting a $269 million net loss for the third quarter on $1.4 billion in revenue, compared with a $943 million net loss on $2 billion in revenue for the third quarter of 2017.

The annuity unit is reporting $401 million in adjusted earnings for the quarter on $1.2 billion in adjusted revenue, up from $355 million in adjusted earnings on $1.1 billion in revenue for the year-earlier quarter.

Here’s how sales of some products did:

• Shield Annuity Contracts: Increased to $867 million, from $653 million,.
• All Variable and Indexed Annuities: Increased to $1.2 billion, from $960 million.
• Fixed Annuities: Increased to $350 million, from $114 million.
• Single-Premium Immediate Annuities (SPIAs): Increased to $16 million, from $7 million.

FBL Financial Group Inc.

The West Des Moines, Iowa-based company is reporting $31 million in net income for the third quarter on $188 million in revenue, up from $26 million in net income on $182 million in revenue for the third quarter of 2017.

Annuity commission expense, net of deferrals, fell to $374,000, from $537,000.

Life commission expense, net of deferrals, fell to $4.2 million, from $4.5 million.

FBL says a reviews of its assumptions led to a $300,000 charge.

Here’s what happened to first-year collected premiums from some of the products FBL sells:

• Fixed Annuities: Fell to $26 million, from $28 million.
• Indexed Annuities: Fell to $56 million, from $58 million.
• Universal Life: Fell to $7.1 million, from $7.3 million.
• Participating Whole Life: Increased to $3.2 million, from $2.4 million.
• Term Life: Held steady at  $2.5 million.

Lincoln National Corp.

The Radnor, Pennsylvania-based company is reporting $490 million in net income for the third quarter on $4.3 billion in revenue, compared with $418 million in net income on $3.5 billion in revenue for the third quarter of 2017.

The annuity operation is reporting $302 million in after-tax operating earnings on $1.1 billion in operating revenue, up from $277 million in earnings on $1.1 billion in operating revenue for the year-earlier quarter.

Annuity commissions incurred increased to $278 million, from $216 million.

Life earnings increased to $176 million on $1.8 billion in operating revenue, from $121 million on $1.6 billion in operating revenue.

Life insurance commissions incurred fell to $173 million, from $176 million.

Here’s what happened to sales of some of the products Lincoln offers:

• Variable Annuities With Guaranteed Living Benefits: Increased to $1.4 billion, from $959 million.
• Variable Annuities Without Guaranteed Living Benefits: Increased to $774 million, from $573 million.
• Fixed Annuities: Increased to $890 million, from $384 million.
• MoneyGuard: Fell to $53 million, from $65 million.
• Variable Universal Life: Increased to $62 million, from $45 million.
• Retirement Plan Services: Increased to $2 billion, from $672 million.
• Group Life: Increased to $69 million, from $33 million.
• Group Disability: Increased to $73 million, from $35 million.
• Group Dental: Fell to $16 million, from $26 million.

The percentage of group business that was employee-paid fell to 40%, from 44.7%.

— Read Ameriprise Increases Variable Annuity Sales 3%, on ThinkAdvisor.

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