U.S. life insurers saw year-over-year increases in individual direct premiums and slight declines in group and individual annuity considerations in the third quarter.
An S&P Global Market Intelligence analysis showed that individual life insurance premiums were up slightly in the third quarter.
Insurers' direct annuity premium and considerations rebounded from a second-quarter plunge, attributed to the effects of the COVID-19 pandemic, but were down compared to the third quarter of 2019, according to the analysis.
Annuity premiums bounce back
Direct annuity individual premiums came in at $52.39 billion, down 3.3% from $54.18 billion in the prior-year quarter. Group premiums totaled $37.15 billion, a slight year-over-year decrease of 0.3% from $37.26 billion.
Massachusetts Mutual Life Insurance Co.
Massachusetts Mutual Life Insurance Co. was the largest annuity underwriter during the third quarter, as its group premiums rose 34.2% year over year to $4.79 billion from $3.57 billion. Individual premiums soared to $2.15 billion from $910 million, a 136.4% jump. Those figures also represented an improvement from the second quarter, when 10 of the largest annuity writers recorded double-digit decreases year over year.
Among the largest annuity writers, the best performances in the sector came from Sammons Enterprises Inc. and Great-West Lifeco Inc., both of which had triple-digit increases in overall premium growth.
Sammons' overall increase of 237.9% was driven by a 242.3% rise in individual premiums, more than offsetting a 21.3% drop in group premiums. Great-West's group premiums rose 199.7%; individual considerations fell 43.1%, leading to an overall increase of 184.6%.
Only four of the remaining 13 companies in the top 15 saw positive year-over-year changes in their overall annuity considerations: TIAA, Aegon NV subsidiary Transamerica, New York Life Insurance Co. and Voya Financial Inc.
Lincoln National Corporation and Athene Holding Ltd. saw their shares of the annuity market fall sharply compared to a year earlier.
Athene's drop was due to a 99.9% year-over-year decrease in group premiums. Individual premiums did rise to $2.5 billion from $1.97 billion in the prior-year quarter, resulting in Athene posting a 45.3% overall decrease in annuity premiums.
Athene President William Wheeler during a third-quarter earnings call said pension risk transfer activity was quiet during the quarter, as had been expected, but picked up as the fourth quarter began. At the time of the call, Wheeler said the company closed transactions totaling $1.6 billion in the quarter.
Positive outlook on life
On an adjusted basis, third-quarter individual life premiums came in at $33.44 billion, a 1.1% rise from $33.08 billion in the prior-year quarter. Group premiums climbed to $9.69 billion, a 4.6% year-over-year increase.
Total life premiums ticked up slightly year over year by 1.8%, compared to a 2.1% year-over-year decline in the second quarter.
Seven of the 15 largest companies, which account for 58.7% of the market, reported year-over-year growth in total premiums.
Northwestern Mutual Life Insurance Co.
Northwestern Mutual Life Insurance Co. remains the largest life underwriter with 8.6% of the market. The company logged individual premiums of $3.71 billion, a 3.8% increase from the prior-year period.
Mutual of Omaha Insurance Co. had the largest year-over-year increase in individual premiums at 6.3%. New York Life had a 5.9% increase, followed by Pacific Mutual Holding Co. subsidiary Pacific Life, 5.2%, and State Farm Mutual Automobile Insurance Co., 4.5%.
MassMutual was excluded from the life insurance part of the analysis as it reclassified certain corporate-owned life insurance and bank-owned life insurance policies from the group classification to individual in 2019. The large reclassification would make year-over-year comparisons for both the company and the industry not meaningful.