@Prudential.
Several of the world’s largest life insurers have revealed their results for the first quarter of 2024. Unlike their P&C counterparts that reported almost universally positive results, life insurers saw more mixed investment results, with several big hitters, such as Prudential Inc., saying they had losses in Q1. Canadian giant Sun Life also missed matching its year-on-year income levels.
This followed EY in November last year saying that life insurers were set for a bumpier year globally.
Texas-based life insurer Globe Life said its net investment income grew 10% over the year-ago quarter.
Net income as a return on equity (ROE) was 21.3% for Q1 2024.
Net operating income as an ROE excluding accumulated other comprehensive income (AOCI) was 14.3% for the same period.
Excess investment income for the company was $43.7 million for Q1 2024, compared to $29.2 million in 2023. Net investment income increased 10% from Q1 2023 to this year.
Canadian financial services giant Manulife revealed its Q1 results on Wednesday and said that its core earnings sat at $1.8 billion, up 16% on a constant exchange rate basis from Q1 2023.
Net income attributed to shareholders of $0.9 billion, down $0.5 billion from Q1 2023.
Investment income per financial statements for Q1 2024 were $4.25 billion compared to $3.25 billion in Q1 2023.
“We had a strong start to 2024 with record levels of new business CSM and new business value, reflecting 52% and 34% growth, respectively."
Investment income in Global Wealth and Asset Management (Global WAM) was $140 million in Q1 compared to $107 million in the same time last year.
In the previous quarter, Manulife said its net income attributed to shareholders was $5.1 billion in full year 2023 results, which was up $1.6 billion from 2022 transitional net income. Q4 2023’s income was $1.7 billion, up $0.4 billion from Transitional Net Income in Q4 2022.
“We had a strong start to 2024 with record levels of new business CSM and new business value, reflecting 52% and 34% growth, respectively,” said Colin Simpson, Chief Financial Officer (CFO) on the Q1 2024 results. “Global WAM saw strong net inflows of $6.7 billion, and our capital position remains robust with a Life Insurance Capital Adequacy Test (LICAT) ratio of 138%.”
Missouri-based Kansas City Life Insurance Company said it recorded a net income of $1.6 million in Q1 2024 compared to a net loss of $3.2 million in the same period last year.
“The largest factor in the improvement in 2024 over 2023 was a $9.4 million decrease in policyholder benefits, net of reinsurance,” said the press release on the results.
Investment revenues increased $2.8 million and contract charges increased $0.9 million compared to one year earlier.
Iowa-based F&G said it had seen record invested assets with strong investment returns in Q1.
The company said its AUM was $49.8 billion as of the end of Q1, which was an increase of 10% from $45.3 billion in the prior year quarter, and was “driven by new business flows, stable in force retention and net debt and equity proceeds over the past twelve months”.
It added that AUM before flow reinsurance was $58 billion as of 31 March 2024. “The investment portfolio is performing well, as expected, with minimal credit-related impairments in the first quarter,” said the press release.
Adjusted net earnings attributable to common shareholders (adjusted net earnings) for the first quarter of $108 million compared to $61 million in Q1 2023.
It said that Q1 2024 results included short term investment income from alternative investments and $6 million of collateralised loan obligations (CLO), redemption gains, and bond prepay income, whereas the first quarter of 2023 included short term investment income from alternative investments and $37 million tax valuation allowance expense.
The US insurer said net income, attributable to Prudential Financial, Inc., was $1.138 billion compared with net income of $1.462 billion in Q1 2023, in its press release.
“During [Q1], we made progress executing on our strategy to become a higher growth, more capital efficient and nimble company."
However, net income in the Q1 included $97 million of pre-tax net realised investment losses and related charges and adjustments, including $83 million of pre-tax net impairment and credit-related losses. This compared to Q1 2023’s realised net investment gains of $369 million.
“During the first quarter, we made progress executing on our strategy to become a higher growth, more capital efficient and nimble company, by expanding our businesses,” said Charles Lowrey, Chairman and CEO, in the press release.
PGIM, the Company’s global investment management business, reported adjusted operating income of $169 million for Q1 2024, compared to $151 Q1 2023.
The US business reported adjusted operating income of $839 million for Q1 2024, compared to $760 million in Q1 2023. “This increase primarily reflects higher net investment spread results and more favourable underwriting results, partially offset by higher expenses and lower net fee income,” said the company.
Sun Life was one of just a few that reported a dip in income but said its overall strategy was on course and would bounce back to profitability.
The Canadian life insurer said it had an underlying net income of $875 million, which was a $20 million – or 2% – decrease from Q1 2023. Underlying ROE was 16%.
“Underlying earnings were affected by the sales of Sun Life UK, higher morbidity claims, and the end of the Public Health Emergency in the US."
Wealth and asset management underlying income was $408 million, a 1% or $3 million drop from the same period last year. “Higher fee income was offset by higher expenses in Asset Management [segment], as well as lower net seed investment income in SLC Management."
Assets under management were $1,470 billion, an increase of $106 billion or 8% from Q1 2023. “[In Q1], we delivered on our Client Impact strategy by advancing our asset management and insurance businesses with strong growth in insurance sales, CSM, and AUM,” said Kevin Strain, President and CEO, in the press release. “Underlying earnings were affected by the sales of Sun Life UK, higher morbidity claims, and the end of the Public Health Emergency in the US. Our capital remains strong.”
In April last year, Sun Life sold its UK operations to Phoenix Group.
