According to AM Best’s Special Report: “First Look: Three-Month 2022 U.S. Life/Annuity Financial Results,” the U.S. life/annuity industry had a very promising first quarter. The results are based on data compiled from life/annuity companies’ three-month 2022 interim statutory statements received by Best as of June 6, 2022 and reflect approximately 91% of the total life/annuity industry’s net premiums.
Important data captured in the report includes:
- A 3.9% increase in total U.S. life/annuity income over the prior-year period
- A 2.7% increase in premiums and annuity considerations
- An 8.6% increase in net investment income
- A 7.8% in total expenses for the U.S. life/annuity industry
- A 7.2% rise in incurred expenses
Also conveyed in the Best report was the industry’s 30.4% decrease in pretax net operating gain, which was reported at $15 billion, along with a lower tax burden and a $10.2 billion decrease in net realized capital losses. Together, they contributed to a net income increase to $13.4 billion.
Always Room for Improvement
Despite its solid first quarter performance, the industry is not without the need for some improvements. For example, the J.D. Power “2022 U.S. Group Life Insurance Study” found group life insurance satisfaction to be 21 points higher (on a 1,000 point scale) than individual life insurance satisfaction across all performance factors except interactions.
The study was based on the responses from 2,170 group life insurance customers conducted in March – April 2022. It measured overall customer satisfaction based on six performance factors: application and orientation, communications, interaction, price, product offerings and statements and found that carriers can increase their customer satisfaction by bolstering their one-on-one communication.