AXA Equitable Holdings Inc. is reporting strong growth in buffer annuity sales and operating earnings for the third quarter.
But the value of derivative contracts the company uses to hedge benefits guarantees fell sharply, and the change in the recorded value of those contracts led the company to post a big net loss for the quarter.
AXA Equitable is reporting a $496 million net loss for the quarter on $1.1 billion in revenue, compared with $10 million in net income on $2.8 billion in revenue for the third quarter of 2017.
Operating income increased to $693 million, from $400 million.
Operating income increased to $434 million, from $326 million, at the individual retirement unit, which is the unit that sells annuities.
Operating income increased to $137 million, from a loss of $3 million, at the protection solutions unit, which sells life insurance.
Spending on commission payments and other distribution-related expenses increased 15% for individual annuities, to $166 million, and 1.5% for protection products, to $66 million.
Sales of the company’s SCS family annuities, or annuities designed to buffer holders against some investment-market-related losses in a downturn, increased 28%, to $1.1 billion. Overall annuity sales increased 18%, to $1.9 billion.