Financial Results

Key Facts

  • Underwriting annuities is now the primary business for life insurers rather than traditional life insurance, accounting for 53 percent of life/annuity direct premiums written in 2023.
  • Net income after taxes for the life/annuity insurance industry decreased to $38.5 billion from $39.4 billion in 2022, according to S&P Global Market Intelligence

Life/Annuity/Accident and Health Sector

Traditional life insurance products such as universal life and term life for individuals, and group life, remain an important part of the business, making up 23 percent of direct premiums written.

Annuities are contracts that accumulate funds or pay out a fixed or variable income stream. The income stream can be for a set period or over the lifetime of the contract holder or beneficiaries. Accident and health insurance, which includes distinctive products apart from traditional health insurance, account for 24 percent of direct premiums written. In addition to annuities, accident and health, and life insurance products, life insurers may offer financial services such as asset management.

Traditional health insurance, which is not included in this section and is not considered a part of the life/annuity sector, is described under Private Health Insurance. Health insurance pays for medical, surgical and hospital services received by the insured, as well as routine and preventive care, usually within a network format. Of the many types of plans available, most include a deductible paid by the insured, and benefits received are tax-free.

Accident and health insurance, a product provided by the life/annuity and property/casualty (P/C) sectors, encompasses a variety of specialty products related to health, such as:

  • reimbursement for the time a policyholder spent in a hospital or was disabled;
  • short- and long-term disability based on employment;
  • long-term care; and
  • critical or catastrophic illness insurance.

Accident and health insurance is not meant to replace health insurance.

Life/Annuity Insurance Income Statement, 2019-2023

($ billions, end of year)

  2019 2020 2021 2022 2023 Percent change,
2022-2023 (1)
Revenue            
Life insurance premiums $149.4 $141.6 $159.1 $163.1 $121.5 -25.5%
Annuity premiums and deposits 347.4 301.2 290.2 350.6 360.7 2.9
Accident and health premiums 183.8 182.3 188.1 189.8 202.9 6.9
Other premiums and considerations (2) 6.7 6.5 6.0 7.3 0.7 -89.8
Total premiums, consideration and deposits $687.2 $631.6 $643.3 $710.8 $685.8 -3.5
Net investment income 193.0 192.2 208.3 205.6 225.3 9.6
Reinsurance allowance -29.7 -22.8 8.4 38.2 28.6 -25.2
Separate accounts revenue 37.5 38.1 41.8 39.2 38.1 -2.7
Other income 49.1 52.4 57.6 59.2 63.3 7.0
Total revenue $937.0 $891.4 $959.5 $1,053.0 $1,041.1 -1.1
Expense            
Benefits 306.4 318.0 343.4 327.8 347.7 6.1
Surrenders 344.5 327.9 367.5 353.0 416.2 17.9
Increase in reserves 123.1 110.3 89.3 131.6 67.9 -48.4
Transfers to separate accounts -72.7 -70.0 -76.3 -51.1 -82.8 61.9
Commissions 61.7 60.5 65.2 68.2 78.1 14.4
General and administrative expenses 69.3 68.4 71.1 72.3 77.6 7.2
Insurance taxes, licenses and fees 9.3 11.5 10.1 10.5 10.9 3.9
Other expenses 14.4 6.3 15.0 61.7 35.7 -42.2
Total expenses $856.1 $832.9 $885.2 $974.1 $951.3 -2.3
Net income            
Policyholder dividends 18.8 18.6 18.4 20.3 22.8 12.3
Net gain from operations before federal income tax 62.1 39.8 55.9 58.5 67.0 14.6
Federal income tax 9.4 5.2 8.2 8.5 13.1 55.6
Net income before capital gains $52.8 $34.6 $47.7 $50.0 $53.9 7.6
Net realized capital gains (losses) -6.7 -10.7 -7.6 -10.6 -15.4 44.4
Net income $46.0 $23.9 $40.1 $39.4 $38.5 -2.3
Pre-tax operating income 62.1 39.8 55.9 58.5 67.0 14.6
Capital and surplus, end of year 442.9 460.4 499.7 489.9 512.6 4.6

(1) Calculated from unrounded data.
(2) The NAIC introduced changes for the Analysis of Operations and Analysis of Increase in Reserves exhibits for 2019 and future periods.

NA=Not applicable.

Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute. 

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Direct Premiums Written by Line, Life/Annuity Industry, 2021-2023 (1)

($000)

  2021 2022 2023
Lines of insurance Direct premiums
written (2)		 Percent
of total 		 Direct premiums
written (2)		 Percent
of total 		 Direct premiums
written (2)		 Percent
of total 
Annuities            
Ordinary individual annuities $206,548,091 26.9% $237,429,226 28.9% $348,527,214 37.0%
Group annuities 163,115,551 21.3 160,156,376 19.5 150,840,408 16.0
Total $369,663,642 48.2% $397,585,602 48.4% $499,367,622 53.0%
Accident and health (3) $209,352,083 27.3% $216,362,805 26.4% $229,001,732 24.3%
Life            
Ordinary life 148,026,526 19.3 163,998,690 20.0 168,683,473 17.9
Group life (4) 39,977,637 5.2 42,805,917 5.2 45,862,855 4.9
Total $188,004,163 24.5% $206,804,607 25.2% $214,546,328 22.8%
All other lines 422 (5) 4,906 (5) 5,517 (5)
Total, all lines (6) $767,020,310 100.0% $820,757,920 100.0% $942,921,199 100.0%

(1) NAIC changed underlying reporting structure for Life-Annuity Exhibit 1, Part 1, Page 9 for 2023. Prior years are mapped from prior reporting structure.  
(2) Before reinsurance transactions.
(3) Excludes accident and health premiums reported on the property/casualty and health annual statements.
(4) Group Life includes Credit Life and Industrial Life for 2022 and prior years due to changes in reporting structure.
(5) Less than 0.1 percent.
(6) Excludes deposit-type funds.

Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute. 

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