For Brighthouse Financial Inc., marking the value of derivatives to market produced good results for the first quarter.
The Charlotte, North Carolina-based life insurer is reporting $5 billion in net income for the first quarter on $9 billion in revenue, up from a $737 million net loss on $691 million in revenue for the first quarter of 2019.
The enormous increase in net results was due mainly to an increase in the current value of the derivatives arrangements that Brighthouse (Stock symbol: BHF) uses to support its annuities.
Net results include $6.9 billion in gains in the “mark to market” value of derivatives that are still in place, compared with a $1.3 billion drop in the market value of derivatives recorded for the year-earlier quarter.
Ordinary revenue increased to $2.1 billion, from $2 billion.
Adjusted earnings, which exclude a number of charges and gains, fell to $211 million, from $232 million.
Annuity sales increased to $2 billion, from $1.7 billion.
Life sales increased to $16 million, from $1 million.
Overall, “our sales were very strong,” Eric Steigerwalt, the company’s chief executive officer, said in a comment included in the earnings announcement.
Steigerwalt said he was especially pleased with the performance of the company’s Brighthouse SmartCare life insurance policy, which is the first life insurance policy that company has introduced since Brighthouse became independent from MetLife Inc.
In other earnings news:
Great-West Lifeco Inc., Winnipeg (Stock symbol: GWO)