Weiss Ratings


Life and Health Insurers' Earn $26 Billion
in First Nine Months of 2004
Industry Separate Accounts Jump $161 Billion

JUPITER, Fla., March 15, 2005 — Profits of the nation's life and health insurers climbed $7.6 billion, or 42 percent, to $25.7 billion in the first nine months of 2004, 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 first nine months of the year reached its highest level in a decade due to the strong performance of insurers' investment returns, which rose $9.2 billion to $112.2 billion compared to the first nine months of 2003.

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

Company Headquarters Weiss
Safety
Rating
Assets
($Bil)
Net Income (Loss) ($Mil)
3rd Qtr
2004
3rd Qtr
2003
$
Change
General Electric Capital Asr. Co. Richmond, Vir. C+ 30.6 1,129.9 239.50 890.4
Metropolitan Life Ins. Co. New York, N.Y. A- 238.8 1,480.5 851.30 629.2
Federal Home Life Ins. Co. Lynchburg, Vir. B 1.7 493.9 11.60 482.4
Continental Assur. Co. Chicago, Ill. C 6.2 405.8 .07 405.7
Hartford Life & Accident Ins. Co. Simsbury, Conn. B+ 10.3 628.0 222.50 405.5

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

In reviewing insurers' investments, Weiss found that investment income jumped $4.5 billion, or 4.2 percent, to $111.6 billion in the first nine months of 2004 compared to $107.1 billion in 2003. In addition, during this same period, the industry earned $551.7 million on the sale of investments, representing a $4.7 billion, or 113.3 percent, improvement compared to the $4.2 billion capital loss reported in 2003.

Insurers reporting the largest year-over-year increases in investment income include:

Company Headquarters Weiss
Safety
Rating
Assets
($Bil)
Investment Income(Loss)
($Mil)
3rd Qtr
2004
3rd Qtr
2003
$
Change
Union Fidelity Life Ins. Co. Chicago, Ill. C 19.3 792.1 46.7 745.5
General Electric Capital Asr. Co. Richmond, Vir. C+ 30.6 1,834.5 1,132.0 702.6
ING USA Annuity & Life Ins. Co. Wilmington, Del. B- 44.2 594.4 20.5 573.9
Metropolitan Life Ins. Co. New York, N.Y. A- 238.8 7,017.8 6,500.0 517.8
Sun Life Asr. Co. of Canada (US) Wellesley Hills, Mass. B- 38.5 536.1 44.2 491.9

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

"In addition to solid investment returns, life and health insurers are enjoying robust earnings as a result of continued strength in the stock market," commented Melissa Gannon, vice president of Weiss Ratings, Inc.

Industry Separate Accounts1 Jump $161 Billion

The value of the industry's separate accounts climbed $161 billion to $1.2 trillion at the end of the third quarter, reflecting continued strength in the equity markets and renewed interest in variable life and variable annuity products.

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

Company Headquarters Weiss
Safety
Rating
Assets
($Bil)
Separate Accounts ($Bil)
3rd Qtr
2004
3rd Qtr
2003
$
Change
Hartford Life & Annuity Ins. Co. Simsbury, Conn. B+ 64.1 57.3 45.5 11.8
Manufacturers Life Ins. Co. Bloomfield Hills, Mich. B+ 67.3 48.1 36.6 11.4
Hartford Life Ins. Co. Simsbury, Conn. B+ 109.6 82.6 71.5 11.1
AXA Equitable Life Ins. Co. New York, N.Y. B- 98.8 56.6 48.8 7.8
Principal Life Ins. Co. Des Moines, Iowa A- 96.6 46.3 39.0 7.3

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

Notable Upgrades and Downgrades

Among the 877 insurers recently reviewed by Weiss, 56 companies were upgraded and nine were downgraded. Insurers upgraded include:

• Personalcare Ins. of Illinois, Inc. (Champaign, Ill.) from E+ to D+
• OSF Health Plans Inc. (Peoria, Ill.) from E+ to D+
• Automobile Club of Southern Calif. (Costa Mesa, Calif.) from D+ to C+

Insurers downgraded include:

• Mony Life Insurance Co. (New York, N.Y.) from C to C-
• Central States H & L Co. of Omaha (Omaha, Neb.) from B to B-
• Employers Life Ins. Corp. (Spartanburg, S. C.) from D+ to D-

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 Ratings, Inc. reviews more than 8,000 stocks daily, including all those traded on the New York Stock Exchange, the American Stock Exchange, and Nasdaq. Weiss also issues investment ratings on more than 12,000 mutual funds, covering equity, fixed-income, and closed-end funds, and provides financial safety ratings on more than 15,000 financial institutions, including banks and insurance companies. It is the only major rating agency that receives no direct or indirect compensation from the companies it rates for issuing its ratings. Revenues are derived strictly from sales of its products and custom research solutions to consumers, institutions, businesses, libraries, and governmental agencies. Ratings and analyses, consumer financial and investment guides, and other products are available for purchase through www.weissratings.com or by calling 800-289-9222.

 

1A separate account is established by an insurer to fund variable annuities, variable life insurance or other contracts where investment returns are based on segregated assets.

 

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Note to Editors: National and state listings of strongest and weakest life, health, and annuity insurers are available.

 

 


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