The first quarter of the year was a good period for some big, publicly traded U.S. annuity issuers and a tough period for others. Earnings releases have begun to pour out of the issuers since last Monday, and the sales and earnings pictures are jumbled. One point was clear, however: Top executives at the issuers are not weeping over the apparent demise of the U.S. Department of Labor's fiduciary rule. Ronald Grensteiner, president of American Equity Investment Life Holding Co., was one of many annuity issuer executives who took questions from securities analysts about the effects of the court ruling blocking the Labor Department's rule, and efforts by the U.S. Securities and Exchange Commission to develop its own rule. "It's probably too early to know if there's going to be any changes in behavior by agents," Grensteiner said during America Equity's first-quarter earnings call with analysts. "I think there's a bit of sigh of relief that the DOL rule is mostly gone." But Grensteiner emphasized that his company will continue to work with regulators to make the industry better. "We're not expecting anything to go crazy here in the next year," Grensteiner said. Here's a look at more of what American Equity and six other issuers said, in their earnings releases, in their financial supplement reports, and during earnings calls. (Related: What a Big Annuity Issuer Sees Out There Now) American Equity Investment Life Holding Co. The West Des Moines, Iowa-based company is reporting $141 million in net income for the latest quarter on $119 million in revenue, compared with $54 million in net income on $927 million in revenue for the first quarter of 2017. The company's results for the first quarter include a $867 million drop in the fair value of embedded derivatives. The company generated $1 billion in total sales, down 4.5% for the total for the first quarter of 2017. American International Group Inc. The New York-based company is reporting $949 million in net income for the first quarter on $12 billion in revenue, compared with $1.2 billion in net income on $13 billion in revenue for the first quarter of 2017. AIG's life and retirement unit is reporting $702 million in after-tax income on $3.5 billion in revenue, compared with $602 million in after-tax income on $3.7 billion for the year-earlier quarter. At that unit, spending on non-deferrable commissions edged higher, to $139 million, from $138 million. The individual retirement unit, which is part of the life and retirement unit, is reporting $499 million in adjusted pre-tax income on $1.4 billion in revenue, compared with $539 million in adjusted pre-tax income on $1.4 billion in revenue for the year-earlier quarter.
In an earnings call presentation, AIG described individual and group retirement net flows as "challenged." Although net flows were negative, the strong stock market helped increase individual variable and indexed annuity assets to $74 billion, from $67 billion. Individual fixed annuity assets fell to $57 billion, from $59 billion. Brighthouse Financial Inc. The Charlotte, North Carolina-based company is reporting a $67 million net loss for the first quarter on $1.8 billion in revenue, compared with a $349 million net loss on $965 million in revenue for the first quarter of 2017. Sales of variable and indexed annuities increased to $1 billion, from $858 million in the year-earlier quarter. Sales of fixed annuities increased to $220 million, from $73 million. FBL Financial Group Inc. The West Des Moines, Iowa-based company is reporting $24 million in net income for the first quarter on $182 million in revenue, compared with $26 million in net income on $182 million in revenue for the first quarter of 2017.
Jim Brannen, FBL's chief executive officer, said during the company's conference call that he believes a new ad campaign, which includes TV ads in Iowa, Kansas and Nebraska, will increase FBL brand awareness and help the company's agents. The ads deliver the message that "our agents provide the much-needed human touch for people who need insurance," Brannen said, according to a written version of his remarks posted by FBL. Brannen the company ended the first quarter with 1,825 exclusive agents and agency managers and would like to have more. "Our recruiting is strong but not overcome the agent attrition we experienced during the quarter," Brannen said. Lincoln National Corp. The Radnor, Pennsylvania-based company is reporting $367 million in net income for the first quarter on $3.6 billion in revenue, compared with $435 million in net income on $3.6 billion in revenue for the first quarter of 2017. After-tax operating income fell 5% at the individual annuity operation, to $267 million, and increased 16% at the life insurance unit, to $144 million.
Dennis Glass, Lincoln's president, said during a conference call with securities analysts that the company plans to introduce an indexed annuity that will be structured as a variable annuity in June. "We'll be allocating a portion of our wholesaling force to the product," Glass said. Glass said he thinks Lincoln's size and wholesaling will both expand the size of the market and help the company capture market share. Glass said he also hopes to announce the addition of an "entirely different distribution channel than we've been in before." The channel would not be a new e-commerce system, Glass said. Prudential Financial Inc. The Newark, New Jersey-based company is reporting $1.4 billion in net income for the first quarter on $13 billion in revenue, compared with $1.4 billion in net income on $12 billion in revenue for the first quarter of 2017. The U.S. individual solutions unit is reporting $565 million in adjusted operating income before income taxes on $2.7 billion in revenue, compared with $586 million in operating income on $2.7 billion in revenue for the year-earlier quarter.
Voya Financial Inc. The New York-based company is reporting $446 million in net income for the first quarter on $2 billion in revenue, compared with a $142 million net loss on $2.1 billion in revenue for the first quarter of 2017. Individual life sales fell to $17 million, from $25 million. The company is selling its individual annuity business and a closed block of variable annuities and did not break out details about the annuity block and annuity unit results. — Read Something Unusual Happened to Q4 Annuity Sales: IRI on ThinkAdvisor. — Connect with ThinkAdvisor Life/Health on Facebook and Twitter.
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