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)
Great-West is reporting the equivalent of $279 million in net income, in U.S. dollars, for the first quarter, on $7.7 billion in revenue, compared with a $519 million in net inome on $13 billion in revenue for the first quarter of 2019.
The exchange rate was 1.34 U.S. dollars per Canadian dollar in the latest quarter, and 1.33 U.S. dollars per Canadian dollar in the year-earlier quarter.
The U.S. unit is reporting $3.7 million in net income on $2.2 billion in revenue, compared with $61 million in net income on $2.3 billion in revenue for the year-earlier quarter.
The number of participants in the company’s U.S. Empower Retirement retiremet plans increased to 9.6 million, from 9.1 million.
National Western Life Group Inc., Austin, Texas (Stock symbol: NWLI)
National Western Life is reporting a $2.1 million net loss for the first quarter on $52 million in revenue, compared with $39 million in net income on $218 million for the first quarter of 2019.
The company recorded a $107 million “mark to market” loss on the current market value of index options that are still in place, compared with a $42 million gain on index options for the year-earlier quarter.
Operating revenue, which excludes the effects of mark-to-market accounting and actual investment gains and losses, fell to $156 million, from $171 million.
The domestic life unit is reporting $634,000 in earnings on negative $8.1 million in revenue, compared with $1.1 million in earnings on $35 million in revenue for the year-earlier quarter.
Life premiums and contract revenue held steady at $11 million.
The annuities unit is reporting an $18 million loss on $15 million in revenue, compared with $17 million in earnings on $108 million in revenue for the year-earlier quarter.
— Read Earnings: Prudential, Genworth, CNO, RGA, Sun Life, on ThinkAdvisor.