Symetra Financial’s first quarter 2014 adjusted operating income was $65.7 million, or $0.56 per diluted share, up from $49.4 million, or $0.36 per diluted share, for the first quarter of 2013, the company reported this week.
For the first quarter of 2014, net income was $79.3 million, or $0.68 per diluted share, compared with $66.0 million, or $0.48 per diluted share, in the same period a year ago.
Deferred annuity sales for the quarter were $627.5 million, nearly double the $322.0 million of the year-ago quarter. Higher interest rates and wider distribution of Symetra annuity products through banks and broker-dealers drove sales of fixed index and traditional fixed annuities.
Income annuity sales were $87.5 million for the quarter, up from $40.7 million in the prior-year quarter. “The continued effectiveness of our sales strategies and a more favorable interest rate environment” helped grow sales of single premium immediate annuities (SPIAs) in the first quarter, according to a Symetra release.
“We continued to achieve strong year-over-year sales growth in annuities, individual life insurance, and group life and disability income insurance,” said Tom Marra, Symetra president and CEO, in the release.
Other performance highlights:
- Benefits loss ratio improved to 57.1% from 68.5% in first quarter 2013.
- Higher fixed indexed annuity account values delivered a significant earnings contribution in deferred annuities.
- Strong year-over-year growth in sales of annuities, individual life, and group life and disability income.
- Guidance range for 2014 Operating EPS raised to $1.80-$2.00.
Deferred annuities
- Pretax adjusted operating income was $30.2 million for the quarter, up from $29.1 million in the previous period. Higher fixed indexed annuity (FIA) account values contributed $6.0 million to interest margin compared to $0.8 million in the prior-year period.
- Earnings for the quarter included $2.1 million of investment prepayment-related income, net of related amortization, compared with $7.4 million in the prior period.
- Total account values were $13.9 billion at quarter-end, up from $12 billion a year ago. Strong FIA sales drove this growth, with FIA account values rising to $2.1 billion from $539.1 million a year ago.
Income annuities
- Pretax adjusted operating income was $9.4 million for the quarter, up from $8.8 million in the prior-year period, primarily due to more favorable mortality experience. This was partially offset by a lower interest spread on slightly lower reserves.
- Mortality gains were $5.3 million for the quarter, compared with mortality gains of $1.0 million in the previous period. Mortality experience can fluctuate from period to period.
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