US life/annuity market posts 16% increase in total revenue: AM Best

During the first three months of 2024, the US life/annuity market’s total revenue increased 16% to $303.2 billion, compared to $261.4 billion from the previous year, according to credit ratings agency AM Best.

This notable increase was driven by a 20.5% increase in premiums and annuity considerations, as well as a 43.6% rise in other income, and an 8.4% increase in net investment income, coming in at $227 billion, $16.4 billion, and $55.8 billion, respectively.

Meanwhile, the US life/annuity market witnessed an 80.4% decrease in net income, during the three month period, falling from $8.1 billion in the prior year, to $1.6 billion.

The rating agency noted that a 20% increase seen in total expenses for the period impacted the industry’s net income. The 20% increase was largely due to a $40.9 billion increase in surrender and other benefits.

Capital and surplus saw a slight decline from the end of 2023 to $499.5 billion, as $6.6 billion of net income, change in unrealised gains, contributed capital, as well as other changes in surplus were reduced by $8.9 billion.

As well as this, holdings in cash and short-term investments were down 2.4% from the end of 2023, as investments in other assets and mortgage loans increased.  AM Best noted that the mortgage loan asset class now constitutes 13.6% of total invested assets.

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