Thursday, June 24, 2010

Moody’s Says Things Are Looking Up for Life Insurers

A year can and does make a substantial difference, as a recent Moody’s Investors Service report suggests. The report from the New York-based agency says that improving business and financial fundamentals are being reflected in life insurance companies’ stock prices and that that improvement has helped restore access to the equity and debt capital markets, according to Ann Perry and Manoj Jethani, the Moody’s analysts who authored the report.

Among the findings in the Moody’s report:

--“In contrast to first quarter 2009, operating earnings and net income for the same period in 2010 were positive for almost all of our tracked companies, producing dramatic improvements of $9 billion and $11 billion in operating income and net income, respectively, for the group of 19 life insurers;”
--“Our group of companies took a total of $1.7 billion in other than temporary impairments in the first quarter of 2010 compared to $6.5 billion in the first quarter of 2009;”
--“In fact, more than half of our group of 19 companies moved into net unrealized gain territory, and all companies showed marked improvement. The net unrealized gain/loss position of about two-thirds of the companies strengthened by over $1 billion each, with MetLife and AIG leading the way with $13.8 and $13.5 billion of reduction in their unrealized loss positions, respectively.”

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