While the life insurance industry continued to face challenges from a sluggish economy and low interest rates in 2012, operating results and capitalization improved as conditions in the stock market eased, according to a May, 2013 report by A.M. Best. Capital, as measured by policyholders surplus, rose from $310.4 billion in 2011 to $328.6 billion in 2012, according to SNL Financial data. The industry’s net gain from operations before federal income taxes rose significantly from $28.0 billion in 2011 to $60.5 billion in 2012, according to SNL. Net income rose from $14.4 billion to $40.9 billion during the same period, the highest level in at least dozen years according to SNL.
LIFE/HEALTH INSURANCE INDUSTRY INCOME STATEMENT, 2008-2012
($ billions, end of year)
|Life insurance premiums||$142.7||$120.6||$100.3||$122.8||$130.6||6.3%|
|Annuity premiums and deposits||323.0||225.5||286.3||327.0||339.9||4.0|
|Accident and health premiums||154.5||160.0||167.8||168.3||170.7||1.4|
|Credit life and credit accident and health premiums||2.1||1.6||1.6||1.6||1.6||-1.7|
|Other premiums and considerations||0.8||0.5||23.1||2.1||2.2||8.5|
|Total premiums, consideration and deposits||$623.1||$508.2||$579.1||$621.8||$645.0||3.7%|
|Net investment income||162.2||156.6||164.1||167.3||166.8||-0.3|
|Separate accounts revenue||21.2||20.4||23.4||26.1||29.5||13.2|
|Increase in reserves||144.2||99.2||96.2||141.2||83.8||-40.7|
|Transfers to separate accounts||22.7||11.1||29.3||32.4||61.6||89.8|
|General and administrative expenses||53.3||54.0||56.6||58.3||59.3||1.7|
|Insurance taxes, licenses and fees||7.3||7.2||7.7||8.0||8.2||3.0|
|Net gain from operations before Federal income tax||-1.4||61.0||53.1||28.0||60.5||116.0|
|Federal income tax||-0.1||10.7||9.0||5.1||10.2||101.0|
|Net income before capital gains||-$1.4||$50.3||$44.1||$22.9||$50.3||119.8%|
|Net realized capital gains (losses)||-50.9||-28.7||-16.0||-8.5||-9.4||10.7|
|Pre-tax operating income||-1.4||61.0||53.1||28.0||60.5||116.0|
(1) Calculated from unrounded data.
Source: SNL Financial LC.