What You Need to Know
- The amount of rich-guarantee annuity business decreased.
- Indexed universal life and variable universal life renewals increased.
- The number of term life policyholders fell.
Equitable Holdings Inc. increased sales of low-risk buffered annuities in the fourth quarter, and it let its book of higher-risk annuity business shrink.
The firm talked about its annuity sales and life insurance sales Tuesday, when it released its earnings for the latest quarter and all of 2020.
Equitable Holdings (NYSE:EQH) is reporting a $1.3 billion net loss for the fourth quarter of 2020 on $516 million in revenue, compared with a $946 million net loss on $2.7 billion in revenue for the fourth quarter of 2019.
But its operating earnings, which exclude the effects of changes in the value of the company’s derivatives, increased to $748 million for the latest quarter, from $653 million for the year-earlier quarter.
Mark Pearson, Equitable’s CEO, said in a statement, that the company has been doing well enough to have $2.9 billion at the top holding company level, even after returning $3.1 billion to investors through dividend payments and share buybacks.
“We are well-placed for the future and look forward to continuing to provide economically sound and in-demand solutions for our clients,” Pearson said.
The New York-based life insurer uses derivatives to hedge or protect annuities and other products against changes in stock prices, interest rates and other variables. The company includes fluctuations in the value of derivatives holdings in its revenue and net results.
Net results for the latest quarter include $3.6 billion in derivatives losses, compared with $1.7 billion in derivatives losses for the year-earlier quarter.
The company’s operating earnings, which exclude the effects of “mark-to- market” derivatives accounting, increased to $748 million for the latest quarter, from $653 million for the year-earlier quarter.