For the life/annuity/health insurance industry, the first quarter of 2010 was profitable on a pace that would roughly repeat the experience of 2009. Premiums were up slightly but operating expenses slightly down; investment results—investment income and net realized capital losses—were down slightly from the 2009 pace. The high unemployment rate, low inflation, and the slow growth of the economy likely account for these modest results; since most economic forecasts expect these conditions to continue at least through 2011, the short-term outlook for profitable results for the industry is positive but not bright.
LIFE/HEALTH INSURANCE INDUSTRY INCOME ANALYSIS, 2005-FIRST QUARTER 2010
($ millions, end of period)
| 2005 | 2006 | 2007 | 2008 | 2009 | First quarter, 2010 |
|
|---|---|---|---|---|---|---|
| Income statement | ||||||
| Premiums, consideration and deposits | $526,289.9 | $578,970.4 | $617,692.0 | $632,201.3 | $512,901.4 | $135,628.3 |
| Net investment income | 155,173.0 | 161,862.0 | 167,744.7 | 161,737.5 | 156,449.9 | 39,926.5 |
| Separate accounts revenue | 16,373.5 | 20,169.0 | 22,897.6 | 21,177.3 | 20,375.3 | 5,597.3 |
| Total revenue | $731,239.3 | $791,929.7 | $821,582.6 | $851,658.9 | $779,032.6 | $183,473.6 |
| Benefits | 191,439.6 | 216,113.5 | 233,126.9 | 245,492.7 | 246,015.8 | 62,125.90 |
| Surrenders | 226,013.2 | 272,108.8 | 305,165.6 | 291,708.9 | 228,671.2 | 52,567.27 |
| Increase in reserves and deposits | 103,615.1 | 69,776.8 | 35,284.6 | 144,163.6 | 99,045.4 | 16,037.48 |
| Commissions | 48,104.8 | 49,847.9 | 51,057.7 | 51,993.5 | 49,031.7 | 11,702.23 |
| General and administrative expense | 46,877.9 | 49,490.4 | 52,558.5 | 54,093.9 | 54,364.5 | 13,272.75 |
| Net transfers to separate accounts | 42,753.8 | 60,911.4 | 66,100.6 | 22,654.6 | 11,098.0 | 4,891.41 |
| Policyholder dividends | 15,939.5 | 16,450.2 | 17,497.0 | 17,736.4 | 15,005.0 | 3,778.44 |
| Income tax | 8,612.2 | 11,090.7 | 11,848.7 | 187.2 | 11,280.4 | 2,742.56 |
| Net realized capital gains (losses) | 3,151.4 | 6,532.0 | (1,498.8) | (50,471.2) | (28,746.1) | (6,232.3) |
| Net Income | 36,474.9 | 37,689.9 | 31,832.3 | (51,834.6) | 21,108.5 | 6,099.4 |
| Pre-tax operating income | 41,935.5 | 42,365.7 | 45,179.9 | (1,174.8) | 61,135.0 | 14,973.9 |
Source: SNL Financial LC.
