The nation’s life and health insurers experienced a $203 million, or 1.6 percent, decline in operating profits during the first three months of 2000, as compared to the year-earlier period, according to a study by Weiss Ratings, Inc., an independent provider of insurance company ratings and analyses. Drags on operating profits included an increase in surrenders and life insurance claims.
However, at the same time, the life and health companies realized a $164.8 million increase in capital gains which helped offset the profit decline. After adjusting for some miscellaneous items, the industry wound up with an overall net profit that was virtually flat when compared with last year’s-up a slight 0.6 percent, or $37.4 million.
“We’ve been in an ideal environment for the insurance industry-a strong economy, low inflation, few bad mortgages or real estate, and even rising bond prices despite the Fed’s recent rate hikes. In this context, the industry’s flat overall results are actually a bit disappointing, raising questions about what might happen in a less favorable environment,” commented Martin D. Weiss, Ph.D., chairman of Weiss Ratings.
Topics Carriers Profit Loss
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