Brighthouse Holds Variable Annuity Sales (Almost) Steady: Earnings

(Credit: Brighthouse)

Brighthouse Financial managed to sell almost as many individual annuities in the second quarter as it sold in the second quarter of 2019.

The company's sales of individual annuities fell to $1.84 billion in the second quarter, from $1.89 billion in the year-earlier quarter.

Brighthouse sales of life insurance increased to $12 million, from $4 million.

Brighthouse uses derivatives to support the annuities it sells. Because of efforts to include fluctuations in the value of its derivatives in its earnings, its second-quarter earnings look bad.

The company is reporting a $2 billion net loss for the second quarter on negative $922 million in revenue, compared with $384 million in net income on $2.4 billion in revenue for the second quarter of 2019.

Adjusted earnings, which exclude the derivatives adjustment and some other gains and charges, look bad, but less bad: They fell to $11 million, from $254 million.

The Charlotte, North Carolina-based life insurer's risk-based ratio continues to be over 515%.

BlackRock recently picked Brighthouse to be one of two insurers helping to provide the annuities powering a 401(k) plan annuitization option.

Eric Steigerwalt, the Brighthouse chief executive officer, cited the arrangement as an example of good news in a comment included in the earnings announcement.

FBL Financial Group (NYSE:FFG)

FBL is reporting $26 million in net income for the second quarter on $201 million in revenue, compared with $32 million in net income on $193 million in revenue for the second quarter of 2019.

FBL's annuity unit is reporting $15 million in pre-tax adjusted operating income on $54 million in revenue, which is about what it reported for the year-earlier quarter.

The annuity unit is reporting that commission spending, net of deferrals, fell to $315,000, from $514,000.

The number of direct annuity contracts provided fell to 50,533, from 52,461.

Here's what happened to first-year payments into two types of annuities between the first quarter of 2019 and the latest quarter:

Traditional fixed Annuities: $4.5 million (down from $14 million)
Group annuities: $36 million (down from $60 million)

FBL's life unit is reporting $12 million in pre-tax adjusted operating income on $109 million in revenue, compared with $18 million in operating income on $111 million in revenue for the year-earlier quarter..

At the life insurance unit, commission spending, net of deferrals, fell to $4.7 million, from $5.2 million.

The number of traditional life policies in force fell to 364,117, from 365,340.

The number of universal life policies in force increased to 74,178, from 71,0149.

Here's what happened to first-year premiums for some types of life products between the second quarter of 2019 and the latest quarter:

Universal life: $5.9 million (down from $8 million)
Whole life: $1.9 million (down from $2.7 million)
Term life and other: $3 million (up from $2.9 million)

Independence Holding Company (NYSE:IHC)

IHC is reporting $538,000 million in net income for the second quarter on $107 million in revenue, compared with $6.9 million in net income on $95 million in revenue for the second quarter of 2019.

Roy T.K. Thung, IHC's chief executive officer, said in a comment on IHC's results that the company now has approvals in 29 states for a new Medicare supplement insurance product.

Three months ago, the company was saying it hoped to have 150 call center agents and 275 career agents on its senior market sales team by Oct. 15, the start of the Medicare Advantage plan annual enrollment period.

The company now says it has 143 licensed agents focused on the primary market and hopes to have 200 agents by Oct. 15.

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