Jupiter, Fla. - If life and health insurers maintain their chokehold on technology spending, it shouldn't be a case of pleading poverty. Just-released figures from Weiss Ratings show that profits in that sector climbed nearly 30% last year, the second consecutive year of growth.
This follows the dramatic 310.8% increase in net income during 2003, when the industry earned $30 billion. The $8.8 billion increase in profits last year, to $38.8 billion, was driven primarily by improving securities markets. In 2004 the industry realized capital gains for the first time since 2000, and investment income grew more than in any single year since 1995.
Weiss reports that insurers with the largest year-over-year increase in profits include: Metropolitan Life Ins. Co., New York, N.Y., (69.5%); General Electric Capital Assurance Co., Richmond, Va., (345%); Federal Home Life Ins. Co., Lynchburg, Va., (2,355.6%); Great-West Life & Annuity Ins. Co., Englewood, Colo., (612.3%); and Hartford Life & Accident Ins. Co., Simsburty, Conn., (98.5).
The group health insurance line of business contributed the most to the industry's increase in profits with net gain up $1.4 billion, or 32%, during 2004. Gains from individual life also contributed to the increase, with profits up $872 million, or 11%, following 8.6% growth in 2003. Lines of business with declining profits in 2004 include individual annuities, group life, and credit health.
Source: Weiss Risk Ratings
