Life insurers revealed their full year and Q4 results over the course of February, with many saying they had a good year.
These numbers followed the more mixed results for their P&C counterparts. However, life insurers had seen positive results for most of last year. In Q3, S&P Global said that “US life insurers are expected to see growth during third-quarter earnings while wrestling with the impact of higher interest rates, a dynamic annuities sector and the commercial real estate market's effect on investment portfolios”.
Overall, the market was expected to be strong for both premiums and underwriting. The US growth rate could be exacerbating that, which comes with some negatives around higher-for-longer outlooks.
EY said in November that life insurers were set for a bumpier year globally, and that, in the UK, life insurance premium income was forecast to grow 6.6% over 2023, which was an upgrade from a 2% contraction in the February forecast but down from 8.8% in 2022.
They added that this was before a predicted slowing to 5.7% in 2024 and 4.4% in 2025.
Canadian Sun Life Financial, one of the largest life insurers in North America, said it saw an underlying net income of $983 million increase $91 million, or 10% from the prior year, for Q4 2023, and an overall 2023 income of $3.728 billion, a substantial increase from 2022 of $3.369 billion.
“Higher Asset Management fee-related earnings and higher investment income
driven by volume growth and an increase in yields."
This was partly driven by its Wealth & Asset Management division, which was up $27 million in the quarter year-on-year.
“Higher Asset Management fee-related earnings and higher investment income driven by volume growth and an increase in yields,” said Sun Life’s press release.
For the full-year results, the company saw investment net income of $1.726 billion, up $53 million or 3% compared to 2022.
Texas-based Globe Life, which is the parent company of American Income Life, Liberty National, and Family Heritage, said its net investment income grew 6.3% over the year-ago quarter. For Q4, excess investment income was $35.8 million for 2023, compared to $30.1 million in 202, a 1% increase.
For its full-year results, excess investment income was $130.4 million for the year, compared to $104.6 in 2022, an upward swing of 25%.
Net investment income in consolidated operations was $2,721.6 million for Q4 and $1.056 billion for the full year. Both were increases on the previous year’s results.
For Q4, average invested assets increased 3.7%. Required interest on policy liabilities increased 4.9%, and average policy liabilities increased 4.5%.
In Q4, the investment portfolio consisted of fixed maturities at 91%, with mortgage loans (1%), policy loans (3%), and other and short-term making up the remainder.
The vast majority of fixed maturities consisted of corporate bonds, followed by municipals, and then government agencies and GSE, and collateralised debt obligations and other asset-backed securities making up the rest.
Its net income as a Return on Equity (ROE) was 23.2% for the twelve months ended 31 December 2023. Net operating income as an ROE excluding accumulated other comprehensive income (AOCI) was 14.7% for the same period.
One of the world’s largest life insurers, MetLife, said in its results, released at the beginning of February, that it had a 25% year-on-year increase in net investment income from $15.9 billion in 2022 to $19.9 billion in 2023.
The company saw large swings in growth for its net investment income, but overall net income saw downward trends with a 71% cut in net income per share year-on-year.
For Q4 2023, net investment income for the company was up by 20% with figures standing at $5.4 billion compared to $4.5 billion in Q4 2022.
The company’s statement on the results said that the rise was driven “by higher interest rates and increases in the estimated fair value of certain securities that do not qualify as separate accounts under GAAP”.
Its adjusted net investment income was $5 billion, up 11% from the prior-year period, largely driven by higher interest rates and asset growth.
Variable investment income was $63 million, compared to variable investment income of $24 million in the prior-year period, primarily driven by higher private equity returns.
Its net investment losses were $174 million, or $137 million after-tax during the quarter, primarily driven by normal trading activity in the portfolio. “Net derivative gains amounted to $149 million, or $118 million after-tax during the quarter, largely driven by a decrease in long-term interest rates,” said the statement.
For full-year results, MetLife’s net income was $1.4 billion, compared to net income of $5.1 billion for the full year 2022. Adjusted earnings were $5.5 billion, compared to adjusted earnings of $5.8 billion for the full year 2022.
For Q4, net income was $574 million compared to net income of $1.5 billion in 2022.
Canadian life insurer Manulife, part of the Manulife Financial Corporation, said its net income attributed to shareholders was $5.1 billion in 2023, up $1.6 billion from 2022 transitional net income attributed to shareholders, and $1.7 billion in Q4 2023, up $0.4 billion from Transitional Net Income in Q4 2022.
"We delivered strong business results of 17% and 13% growth year-over-year
in core EPS and core earnings, respectively."
In its CORE EBITDA margin and core revenue, the company said it had investment income (per financial statements) of $4.49 billion in Q4 2022, compared to $4.27 in Q4 2022.
Full-year results in the same category were $16.18 billion for 2023 compared to $15.2 billion for 2022.
“2023 was a milestone year for Manulife. We delivered strong business results of 17% and 13% growth year-over-year in core EPS and core earnings, respectively, as well as core ROE of 15.9% in 2023,” said Roy Gori, President and CEO.
The company also highlighted that it had seen a “smooth transition” to IFRS 17 over the year.
