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AIG Will Do It. So Will Pru, Equitable and Lincoln...

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What You Need to Know

  • Life, health and annuity issuers are starting to show their first-quarter numbers.
  • The Fed seems to be intent on raising interest rates.
  • Long COVID is a wild card.

Life and annuity issuers will begin reporting their earnings for the first quarter of this year on Wednesday, when Globe Life posts its results, sometime after 4 p.m. Eastern Daylight Time.

Two large, publicly traded health insurers — UnitedHealth Group and Anthem — have already released their earnings. UnitedHealth reported higher net income on higher revenue than it reported for the first quarter of 2021.

Most public companies invite securities analysts to participate in quarterly earnings review conference calls. Members of the public, including agents and brokers, can listen to the livestreams in listen-only mode, and they can also listen to the recordings of the calls.

Insurers post links to the conference calls and the call records in the investor relations sections on their websites.

So, what will the analysts be asking the companies about? Here are five possibilities.

1. How are the interest rates affecting you?

The Federal Reserve Board has changed life, health and annuity issuers’ gameboard by moving to start a series of increases in the interest rate benchmarks it controls.

The Fed sees easy money fueling big increases in prices, and it hopes higher interest rates will push consumers to put more money in the bank and spend less on cars, houses and online streaming services.

Life, health and annuity issuers tend to be buy-and-hold bond investors. They try to keep the bonds until they mature and pay out naturally, rather than buying and selling bonds early.

The rate increases could help insurers by increasing yields on their trillions of dollars in bonds.

Increase could also hurt the prices of the bonds that insurers have made available for active trading.

And rate increases that are high enough to hurt the overall economy could hurt customers’ demand for some types of products, but boost sales of products that protect the holders against ups and downs in the financial markets, such as traditional fixed annuities, non-variable indexed annuities and registered index-linked annuities that offer access to strong protection against market swings.

2. What did COVID-19 do?

The pandemic led to long testing lines and full hospital emergency rooms in January.

Public health agency indicators for February and March looked much better than those for January, but the public health agency indicators are often subject to severe reporting lags.

Life, health and annuity issuers might have ideas about what really happened.

One question, which should hover in the back of people’s minds for decades, is whether “long COVID” will eventually do enough damage to affect claims and earnings over the long-term, even if the world gets the acute version of the disease under control.

3. Will Russia’s invasion of Ukraine affect you?

U.S. life, health and annuity issuers have little direct exposure to investments or customer relationships in Russia and Eastern Europe, but effects could bubble up through reinsurance arrangements or through investments in holdings such as oil and gas bonds that might be affected by the Russia-Ukraine war.

4. What was the Medicare Advantage market like?

Some insurers seem to have hinted at brutally low pricing.

Executives at UnitedHealth Group suggested when they posted their first-quarter earnings that, even though the Medicare Advantage tends to look calm from the outside, it’s always brutal.

5. Are the new accounting rules going to hurt you?

Life and annuity issuers are coming under new long-duration targeted Improvements accounting rules that will change the way they report the performance of product lasting a long time, such as whole life insurance and long-term care insurance.

Insurers began talking about the effects of the new rules on what their future earnings might look like when they posted earnings for the fourth quarter of 2021, and LTDI conversations might get more detailed this earnings release season.

In the past, some observers thought the rules might put insurers’ earnings on a roller coaster.

Recently, insurers have been suggesting that the effects might be manageable.

The Release Schedule

Here’s a partial list of this quarter’s life, annuity and health issuer earnings release dates.

April 14

  • UnitedHealth Group (UNH)

April 20

  • Anthem (ANTM)
  • Globe Life (GL)

April 25

  • Ameriprise Financial (AMP)

April 26

  • Centene Corp. (CNC)

April 27

  • Aflac Inc. (AFL)
  • Humana (HUM)
  • Molina Healthcare (MOH)

April 28

  • Principal Financial Group (PFG)

May 2

  • CNO Financial Group (CNO)

May 3

  • American International Group (AIG)
  • EHealth (EHTH)
  • Genworth Financial (GNW)
  • Prudential Financial (PRU)
  • Voya Financial (VOYA)

May 4

  • American Equity Investment Life Holding Co. (AEL)
  • Bright Health Group (BHG)
  • CVS Health (Aetna) (CVS)
  • MetLife (MET)
  • Unum Group (UNM)

May 5

  • Horace Mann Educators Corp. (HMN)
  • Lincoln National Corp. (LNC)
  • Primerica (PRI)
  • Reinsurance Group of America (RGA)

May 6

  • Cigna Corp. (CI)

May 9

  • Brighthouse Financial (BHF)
  • Lemonade (LMND)

May 10

  • Equitable Holdings (EQH)
  • Jackson Financial (JXN)
  • Oscar Health (OSCR)

May 11

  • Manulife Financial Corp. (MFC)

To Be Announced

  • Fidelity National Financial (Fidelity & Guaranty) (FNF)
  • GoHealth (GOCO)
  • Sun Life Financial (SLF)

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