SOURCE: Weiss Ratings

Weiss Ratings

May 23, 2012 11:20 ET

Largest Life & Annuity Insurers' Profits Drop 84 Percent

17 Insurers Lead Industry Decline

JUPITER, FL--(Marketwire - May 23, 2012) - Profits of the nation's 20 largest life and annuity insurers declined 84 percent, from $14.8 billion to $2.4 billion, according to a review of year-end 2011 data by Weiss Ratings, a leading independent rating agency of U.S. insurance companies and financial institutions.

The 20 largest insurers make up 54 percent of the industry's assets but brought in only 12.8 percent of its net income in 2011. Overall, the industry earned $18.6 billion, down 38.2 percent from $30.1 billion in 2010.

While 17 of the 20 insurers had substantial declines, three reported improved financial performance in 2011. Hartford Life Insurance Company, a unit of Hartford Financial Services Group (HIG), with a Weiss Financial Strength Rating of C ("Fair"), reported a 50 percent increase in earnings, from $122.5 million to $184.2 million during the same period. Axa Equitable Life Insurance, a unit of Axa Financial, Inc. (AXAHY), with a rating of C+ ("Fair"), turned around a loss of $510 million in 2010, earning a profit of $967 million last year. Teachers Insurance and Annuity Association of America, rated A+ ("Excellent"), saw profits jump from $1.4 billion in 2010 to $2.4 billion in 2011, a 71 percent increase.

Among the 20 largest insurers, those reporting the greatest declines were:

Net Income/(Loss) ($Mil) Year-Over-Year Change
Institution State Weiss
Strength Rating



John Hancock Life Insurance Co. (USA) MI B 103.8 (2,887.5) (2,991.4) (2,880.8)
Transamerica Life Insurance Co IA C 417.7 (2,459.3) (2,887.0) (688.8)
RiverSource Life Insurance Co. MN C- 1,111.8 (599.3) (1,711.1) (153.9)
Pacific Life Insurance Co. NE A- 741.4 (735.5) (1,476.9) (199.2)
Jackson National Life Insurance Co. MI B+ 769.6 (591.1) (1,360.6) (176.8)
American Family Life Assur. Co. of Columbus NE B+ 1,468.1 443.6 (1,024.5) (69.8)
Weiss Financial Strength Rating: A=Excellent; B=Good; C=Fair; D=Weak; E=Very Weak
Plus sign = top of grade range; minus sign = bottom of grade range
Data source: SNL Financial

The remaining 768 insurers covered in the study enjoyed a 6.3 percent increase in net income during 2011, earning $16.3 billion compared to $15.3 billion in 2010. These insurers now represent 87 percent of the industry's total net income compared to only 51 percent one year ago.

Gavin Magor, senior financial analyst at Weiss Ratings, commented: "Although these declines are dramatic, they do not put the companies at risk of failure. Much of the decline is attributable to the companies paying out more annuity withdrawal benefits and adding to reserves at a time when contract holders are taking increasingly greater advantage of such benefits."

To view the strongest and weakest life insurers, visit The strongest and weakest annuity insurers can be found at

About Weiss Ratings

Weiss Ratings, the nation's leading independent provider of bank, credit union and insurance company financial strength ratings and sovereign debt ratings, accepts no payments for its ratings from rated institutions. It also distributes independent investment ratings on the shares of thousands of publicly traded companies, mutual funds, closed-end funds and ETFs.

Note to Editors: State-specific lists of life and annuity ratings are available upon request.

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