U.S. Life Insurers Saw Double-Digit Growth In 2009
A new report released by Moody’s Investors Services Inc. revealed that U.S. life insurers enjoyed double-digit growth in total capital and surplus in 2009. According to Moody’s, companies that it rates have reported a 13 percent growth to $237 billion from $210 billion, which is great news for life insurance companies.
Why the Improvements?
According to the report, one factor fueling the increases in capital and surplus were improvements in operating income to $41 billion after a loss of $9 billion in 2008. It also noted that the “robust equity markets” improved earnings in both group and annuity operations.
However, there were some losses to go around in the life insurance sector. According to the report, there were large realized and unrealized losses in derivatives as a result of losses from hedging variable annuities. The net realized and unrealized losses for 2009 totaled $36 billion, which was still much better than the $56 billion lost in 2008.
Other Reasons for Improvements
There have been a number of reports in the news lately to give insight into why the numbers may have improved so much last year. One report discussed how life insurance rates declined in 2009. This likely encouraged more consumers to purchase more policies.
Also, some felt that they had an increased need for life insurance after the recession. The financial security that they lost in the stock market crash could be regained through a policy. It’s for this reason that activity was up in January, online life insurance searches reached record numbers and overall, customers value their policies more than ever.
Have you purchased life insurance yet? If not, now’s the time to search for a policy.