Major U.S. life and health insurers have published a series of sobering earnings releases this week.
MetLife Inc., New York
4 Q 2008 Results
NET INCOME: $985 million
NET REALIZED INVESTMENT CHANGE: $2.1 billion gain
REVENUE: $14 billion
4 Q 2007 Results
NET INCOME: $1.1 billion
NET REALIZED INVESTMENT CHANGE: $94 million loss
REVENUE: $12 billion
- Institutional premium revenue increased 18%, to $4.2 billion.
- Non-medical health premiums and fees increased 13%, in part because of continuing strong growth in dental revenue.
- Variable annuity deposits fell to $3.8 billion, from $4 billion, and fixed annuity deposits rose to $499 million, from $320 million.
- The average annualized general account spread fell to 2.01%, from 2.7%, for individual annuities.
- The retirement and savings unit is reporting a $618 million net loss, compared with $211 million in net income for the fourth quarter of 2007, in part because of $712 million in net investment losses.
Prudential Financial Inc., Newark, N.J.
4 Q 2008 Results
CONSOLIDATED NET INCOME: $1.6 billion loss
NET FINANCIAL SERVICES BUSINESS REALIZED CAPITAL CHANGE: $511 million loss
FINANCIAL SERVICES BUSINESS INVESTMENT CHANGE ON TRADING ACCOUNT ASSETS: $815 million loss
CONSOLIDATED REVENUE: $6.7 billion
4 Q 2007 Results
CONSOLIDATED NET INCOME: $871 million
NET FINANCIAL SERVICES BUSINESS REALIZED CAPITAL CHANGE: $91 million loss
FINANCIAL SERVICES BUSINESS INVESTMENT CHANGE ON TRADING ACCOUNT ASSETS: $10 million loss
CONSOLIDATED REVENUE: $8.8 billion
- Financial services unit operating income increased to $878 million, from $787 million.
- Individual life sales fell to $86 million, from $89 million.
- Premiums from new group life business increased to $76 million, from $35 million, and premiums from new group disability business increased to $26 million, from $16 million.
- The individual annuities operation is reporting a $1 billion loss for the quarter, compared with $171 million in operating income for the fourth quarter of $171 million.
Hartford Financial Services Group Inc., Hartford
4 Q 2008 Results
NET INCOME: $806 million loss
NET REALIZED CAPITAL CHANGE: $816 million loss
REVENUE: $565 million
4 Q 2007 Results
NET INCOME: $595 million
NET REALIZED CAPITAL CHANGE: $429 million loss
REVENUE: $5.7 billion
- Individual annuity net outflows were $1.9 billion.
- Life insurance in force increased to $195 billion, with term life growing 21%, to $63 billion.
- Retirement plan deposits grew 40%, to $2 billion
Aflac Inc., Columbus, Ga.
4 Q 2008 Results
NET INCOME: $197 million
NET REALIZED CAPITAL CHANGE: $262million loss
REVENUE: $4.3 billion
4 Q 2007 Results
NET INCOME: $382 million
NET REALIZED CAPITAL CHANGE: $1 million loss
REVENUE: $4 billion
- About $117 million of the investment losses were the result of the collapse of 3 large Icelandic banks.
- Aflac has large operations in Japan, and they benefited from a 14% increase in the strength of the yen relative to the dollar.
- Cancer insurance sales in Japan were up 20%, but sales of products through banks were down 27%, in part because banks were busy calling customers of other insurers to talk to them about the effects of the world economic crisis, Aflac says. "Those service calls took away from the time available to sell our products," Aflac reports.
Unum Group Corp., Chattanooga, Tenn.
4 Q 2008 Results
NET INCOME: $42 million
