Brighthouse, Pru Say Their Annuity Operations Look Good

Two of the gorillas in the U.S. individual life and annuity markets say those operations did well in the third quarter.

Brighthouse Financial Inc. reported strong Shield annuity sales in the first earnings release it has issued since its former parent, MetLife Inc., spun it off as a separate company.

Prudential Financial Inc. said the strength of the stock market increased variable annuity account values, and higher variable annuity accounts led to a helpful increase in fees related to account value.

(Related: How Have the Annuity Issuers Really Been Doing?)

The third quarter started July 1 and ended Sept. 30. At press time, Brighthouse and Prudential were getting ready to hold conference calls with securities analysts to go over their third-quarter results.

Here's a look at annuity and life insurance highlights from the releases.

Brighthouse

Brighthouse, a Charlotte, North Carolina-based company that focuses on the individual life and annuity markets, posted third-quarter earnings affected by many unusual benefits and charges related to its separation from MetLife.

The company as a whole is reporting a net loss of $943 million on $2 billion in revenue, compared with a net loss of $158 million on $1.8 billion in revenue for the third quarter of 2016.

Operating earnings at life unit fell to $6 million, from $25 million, but operating earnings from annuities increased to $355 million, from $247 million in the year-earlier quarter.

Life sales fell to $5 million, from $28 million, but annuity sales increased to $1.1 billion, from $995 million.

Sales of annuities in the Shield family increased 15% from year-earlier levels, the company said.

Prudential

Prudential is reporting $2.2 billion in net income for the third quarter on $16 billion in revenue, compared with $1.8 billion in net income on $17 billion in revenue for the third quarter of 2016.

U.S. individual life adjusted operating income increased to $150 million, from $111 million.

Group insurance edged lower to $61 million, from $62 million.

Individual annuity adjusted operating earnings fell to $577 million, from $588 million, but, excluding the effects of a variety of current-quarter and year-earlier quarter adjustments, individual annuity results were up $80 million, Prudential said.

Investment earnings on the assets backing fixed-rate individual annuity options were down, but earnings related to variable investment options were up, the company said.

Total sales of variable annuities fell to $1.3 billion, from $2.1 billion, but sales of contracts in the Highest Daily Suite family, which is set up in such a way that Prudential retains the risk, edged lower to $576 million, from $587 million.

Sales of fixed annuities decreased to $11 million, from $12 million.

Independent financial planners accounted for $597 million in sales, and insurance agents accounted for $418 million in sales.

—Read Brighthouse Leaps Into the Annuity Future on ThinkAdvisor.

Correction: Some of the Prudential numbers in an earlier version of this article were incorrect and have been updated.

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