Overall, U.S. life insurers and annuities issuers impressed in the third quarter of 2020, despite dealing with extreme market volatility, low interest rates, and COVID-19. Seven out of 11 publicly traded, U.S.-based life and annuity issuers reported net profits Q3 profits over the last two weeks, while 10 out of 11 posted operating profits.
Check out a breakdown of the companies below:
Lincoln National Corp.
Lincoln National Corp., aka Lincoln Financial, reported $398 million in net income for Q3 on $4.8 billion in operating revenue. Last year, it posted a $161 million net loss on $4.7 billion in operating revenue for the third quarter.
Lincoln’s annuities unit is reporting $196 million in pre-tax operating income on $1.1 billion in operating revenue, up from $168 million in pre-tax operating income on $1.1 billion in revenue for Q3 2019.
Commissions incurred fell to $248 million, from $295 million.
Here’s what happened to deposits into the two major classes of annuities between the third quarter of 2019 and the latest quarter:
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Fixed Annuities: $87 million (down from $1 billion)
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Variable Annuities: $2.5 billion (up from $2.4 billion)
American International Group
American International Group (AIG) reported $299 million in net income for Q3 on $10 billion in revenue, that’s down from last year, when it reported $973 million in net income on $13 billion in revenue for the third quarter.
Below is some insight into what happened to net flows of assets for several individual retirement products, in the U.S., between Q3 of 2019 and Q3 202:
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Indexed annuities: A $638 million inflow (down from a $1.2 billion inflow)
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Variable annuities: A $459 million outflow (compared with a $435 million outflow)
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Fixed annuities: A $290 million outflow (compared with a $120 million outflow)
Equitable Holdings
Equitable Holdings Inc. reported a $705 million net loss for Q3 on $1.8 billion in revenue. Last year, it reported a $306 million net loss on $3.1 billion in revenue for the third quarter of 2019.
The New York-based life insurer uses derivatives to 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.
The company’s operating earnings, which exclude the effects of “mark to market” derivatives accounting, fell to $568 million for the latest quarter, from $673 million.
Equitable’s individual retirement products unit is reporting $371 million in operating earnings for the latest quarter on $1.1 billion in revenue, compared with $465 million in operating earnings on $1.2 billion in revenue for the year-earlier quarter.
Individual retirement unit commission spending fell to $71 million, from $72 million.
Prudential Financial
Prudential is reporting $1.5 billion in net income for Q3 on $13 billion in revenue. That’s up from $1.4 billion in net income on $12 billion in revenue for the third quarter of 2019.
The life insurer says operating income remained steady at around $1.3 billion.
The U.S. individual solutions division reported $509 million in adjusted operating income before income taxes on $2.8 billion in revenue in Q3 2020, compared with $518 million in adjusted operating income before income taxes on $2.8 billion in revenue in Q3 2019.
Individual Annuities
Variable annuity sales fell to $1.2 billion, from $2.3 billion, while fixed annuity sales increased from $319 million to $376 million.
Brighthouse Financial
Brighthouse Financial reported a $3 billion net loss for the third quarter on $2.2 billion in revenue before “mark-to-market” adjustments for net investment income and net derivatives values changes, compared with $685 million in net income on $2.1 billion in revenue before mark-to-market adjustments for the third quarter of 2019.
Sales of individual annuities increased to $2.3 billion in the third quarter, from $1.8 billion in Q3 2019.
Primerica
Primerica reported $112 million in net income for the third quarter on $568 million in revenue, up from $96 million in net income on $521 million in revenue for the third quarter last year.
The number of life insurance policies sold jumped from 73,434 policies to 100,199 policies.
Fidelity National Financial
Fidelity National Financial is a title insurer that recently acquired Fidelity & Guaranty. At the moment, the company is still releasing F&G’s earnings separately.
F&G is reporting $38 million in net income for the third quarter on $442 million in revenue, compared with $58 million in net income on $455 million in revenue for the third quarter of 2019.
F&G’s indexed annuity sales increased to $815 million, from $590 million.
Sales of multi-year guaranteed annuity (MYGA) contracts jumped from $107 million to $253 million.
American Equity Investment Life Holding Co.
American Equity Life is reporting a $667 million net loss for the third quarter on $799 million in revenue. In 2019,it reported $37 million in net income on $643 million in revenue for the third quarter.
The net results were affected partly by a $205 million increase in the fair value of derivatives.
Operating results, which were calculated differently, amounted to a loss of $250 million, compared with $233 million in operating income for the same quarter last year.
Overall annuity sales were down 56% from a year prior. Sill, annuity sales were 3% higher than in the second quarter.
Horace Mann Educators Corp.
Horace Mann reported $37 million in net income for Q3 on $337 million in revenue, up from $25 million in net income on $337 million in revenue for the third quarter of 2019.
The company’s retirement unit is reporting $7.8 million in core earnings on $137 million in annuity contract deposits and $8 billion in assets under management, up from $5.9 million in core earnings on $128 million in sales deposits and $7.9 billion in assets a year earlier.
The total number of annuity contracts grew from 227,000 to 230,000.
Here’s what happened to contract deposits for two types of annuities between the third quarter of 2019 and the latest quarter:
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Fixed Annuities: $79 million (up from $74 million)
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Variable Annuities: $59 million (up from $55 million)
FBL Financial Group
FBL reported $21 million in net income for Q3 on $198 million in revenue, compared with $25 million in net income on $185 million in revenue for Q3 2019.
FBL’s annuity unit is reporting $19 million in pre-tax adjusted operating income on $53 million in revenue, up from $8.1 million in pre-tax adjusted operating income on $51 million in revenue for the year-earlier quarter.
The annuity unit reported that commission spending, net of deferrals, fell to $320,000, from $405,000.
The number of direct annuity contracts fell from 52,914 to 50,217, while first-year premiums for fixed-rate annuities increased to $14 million, from $13 million.
Kansas City Life Insurance Company
Kansas City Life Insurance Company sreported a $1.2 million net loss for the third quarter on $128 million in revenue, compared with $4.5 million in net income on $126 million for the third quarter of 2019.
