Conning Research: Life Insurance Industry Profitable in 2009 Despite Ongoing Capital Challenges

Life-Annuity Forecast & Analysis 2009-2011 by Line of Business, Year-End 2009

Estimate $16 billion net income in 2009 after $20 billion in capital losses

(Hartford, CT) December 1, 2009 – The life insurance industry is still working through capital losses and capital constraints resulting from the 2008 financial crisis with some success, according to a new study by Conning Research and Consulting.

“We project net after-tax statutory income of $16 billion for 2009—less than half the pre-crisis figure of 2007—despite capital losses of $20 billion in the year,” said Terence Martin, analyst at Conning Research & Consulting. “Even with a $16 billion capital infusion in 2009, the industry is still well below pre-crisis 2007 levels, and capital leverage ratios have risen dramatically. The industry will continue to face capital constraints in the short term, even as capital losses abate.”

The Conning Research study, “Life-Annuity Forecast & Analysis 2009-2011,” reviews and projects performance for the U.S. life-annuity industry and its key lines of business.

“Underpinning our 2009 forecast is a substantial partial release of the large reserves the industry set up in 2008 for individual annuity minimum guarantees,” said Stephan Christiansen, director of research at Conning. “Annuities have been the volatile segment for the industry, generating a $4 billion loss for the combined 2008-2009 period, compared to a $12 billion gain in 2007 alone. Life insurance products, on the other hand, have been remarkably stable during the crisis, and this year will generate over $8 billion of net operating gain–in line with prior years.”

“Life-Annuity Forecast & Analysis 2009-2011” is available for purchase from Conning Research & Consulting by calling (888) 707-1177 or by visiting the company’s web site at

About Conning Research & Consulting

Conning Research & Consulting provides insurance industry analysis to insurers and industry stakeholders. Its published research includes market coverage of 30 segments of the industry in addition to industry forecasting and identification and analysis of major strategic issues. As a result of its wealth of experience and intimate knowledge of the insurance industry, Conning understands industry challenges and opportunities and provides in-depth analyses on a wide range of industry products and issues. The Conning name has represented excellence in independent insurance industry research for 50 years. Conning Research & Consulting is a division of Conning, a provider of asset management and insurance industry research and consulting services to insurers. Conning is headquartered in Hartford, CT.