The hits for life/health insurers just keep on coming. According to a recently released A.M. Best Statistical Study, only two of the top 25 U.S. life/health writers were immune from a decline in total admitted assets last year. Study data went on to show a 10.1% decline in admitted assets at the end of 2008 to $3.6 trillion, and an 8.7% decline for the entire industry to $4.6 trillion.
A substantial decline in separate account assets at 28% year-over-year from the downturn in the equity markets, said Andrew Edelsberg, VP of A.M. Best Co., was the major driver for the decline. Admitted assets, he said, includes both general account assets and separate accounts.
The companies in the top 25 showing the greatest declines in admitted assets, A.M. Best reported, were Nationwide Life Group (down 21.7%); Hartford Life Group (down 21%); AXA Financial Group (down 20.6%); Lincoln Financial Group (down 16.4%) and Ameriprise Financial Group (down 15%). AIG Life Group and Principal Life Group shared 14.9% drops in admitted assets.
The study, however, noted two companies recording year-over-year gains. Aflac Inc. Group, ranked 18th, showed a 28.9% increase in admitted assets, to nearly $72 billion. The other company, State Farm Life Group, ranked 25th, showed a 3.2% increase, at $46.3 billion in admitted assets.
Ken Janke, Aflac's SVP of investor relations, said in the release that the primary reason for the gain was the 25% increase in the value of the Japanese yen versus the dollar from the end of 2007 to the end of 2008.
A.M. Bests Edelsberg noted that general account assets for the top 25 increased 2% from the previous year. He said he thinks this was driven by the three mutualsNew York Life Group, MassMutual Financial Group and Northwestern Mutual Group, whose sales aren't driven by variable products, as well as Aflac, which doesn't offer variable products. So Aflac's assets aren't correlated with the equity markets, he said.
Top-ranked Metropolitan Life & Affiliated Cos. showed a 7.1% decline in admitted assets, at $422.6 billion, while No. 2-ranked Prudential of America Group showed a 10% decline, at $348.2 billion, the report said.
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