Life and Health Insurers' Profits Plunge 38%
in First Quarter 2003, Lowest Level in Decade

Industry Increases Policy Reserves by $14 Billion

PALM BEACH GARDENS, Fla., September 2, 2003 - Profits of the nation's life and health insurers fell $1.7 billion, or 37.8 percent, to $2.8 billion in the first three months of 2003, according to Weiss Ratings, Inc., the nation's leading independent provider of ratings and analyses of financial services companies, mutual funds, and stocks. Industry profitability for the three-month period reached its lowest level in 10 years.

Insurers reporting the largest year-over-year decreases in earnings include:

Company Headquarters Weiss Safety
Net Income (Loss) ($Mil)
1st Qtr
1st Qtr
Equitable Life Assur. Society of the US New York, N.Y. B- (114.1) 85.3 (199.4)
Metropolitan Life Insurance Co. New York, N.Y. B+ 246.5 391.4 (144.9)
American General Life Insurance Co. Houston, Texas B+ 60.3 194.7 (134.4)
Teachers Ins. & Annuity Assoc. of Amer. New York, N.Y. A+ (113.2) 12.0 (125.2)
Prudential Insurance Co. of America Newark, N.J. B- 26.5 136.1 (109.6)

Weiss Safety Rating: A = Excellent; B = Good; C = Fair; D = Weak; E = Very Weak; F=Failed

Industry Increases Reserves by $14.1 Billion

Driving the decline in industry earnings, insurers reported a $14.1 billion, or 51 percent, increase in reserves, which rose to $41.8 billion in the first quarter of 2003, compared to $27.7 billion in the first quarter of 2002.

Life and health insurance companies reporting the largest increases in reserves include:

Company Headquarters Weiss
Increase in
1st Qtr 2003
Nationwide Life Insurance Co. Columbus, Ohio B+ 1,127.3
Allianz Life Insurance Co of N. America Minneapolis, Minn. C+ 1,590.3
AIG Annuity Insurance Co. Amarillo, Texas B 2,266.9
New York Life Insurance Co. New York, N.Y. A 637.4
Lincoln National Life Insurance Co. Fort Wayne, Ind. B- 630.2
Weiss Safety Rating: A=Excellent; B=Good; C=Fair; D=Weak; E=Very Weak

In addition, insurers suffered a $2.8 billion capital loss on the sale of investments during the first three months of 2003, compared to a $1.7 billion loss during the same period a year ago.

"Insurers continue to suffer the effects of the economic downturn," said Melissa Gannon, vice president of Weiss Ratings, Inc. "In addition to capital losses, the decline in interest income has forced insurers to reallocate profits to reserves in order to meet annuity contract obligations."

The Weiss Safety Ratings are based on an analysis of a company's risk-adjusted capital, five-year historical profitability, quality of investments, liquidity, and stability. The latter category combines a series of factors including asset growth, premium growth, strength of affiliate companies and risk diversification.

Weiss issues safety ratings on more than 15,000 financial institutions, including insurance companies, banks, and brokerage firms. Weiss also rates the risk-adjusted performance of more than 12,000 mutual funds and more than 8,000 stocks. Weiss Ratings is the only major rating agency that receives no compensation from the companies it rates. Revenues are derived strictly from sales of its products to consumers, businesses, and libraries.

Consumers needing more information on the financial safety of a specific company can purchase a rating and summary analysis for as little as $7.95 through, or starting at $15 by calling 800-289-9222.

15430 Endeavour Drive, Jupiter, FL 33478 · (561) 627-3300 ·

Note to Editors: National and state listings of strongest and weakest life, health, and annuity insurers are available. To read the companion release, "Insurers National Life, MetLife Investors, and Integrity Life Downgraded by Weiss Ratings," click here.