Symetra Financial Corp. this week reported second quarter 2014 adjusted operating income of $55.3 million ($0.48 per diluted share), up from $52.7 million ($0.40 per diluted share) for the second quarter of 2013.
Net income in 2Q2014 was $71.5 million ($0.62 per diluted share), compared with $45.0 million ($0.34 per diluted share) in the same period a year ago. Other highlights of the second quarter earnings report included:
- Sales of deferred annuities in the latest quarter were $650.3 million, up 47% from the same quarter a year ago.
- Sales of income annuities were $89 million for the quarter, up from $45.5 million in the prior-year quarter.
- Benefits loss ratio improved to 62.7% from 66.2% in second quarter 2013.
- Prepayment-related income, net of amortization, of $4.3 million was offset by $4.3 million charge for prior years’ state sales and use tax expense.
- Net prepayment-related income was $5.8 million in second quarter 2013.
- All business segments reported strong year-over-year growth in sales.
Deferred annuities
In Symetra’s deferred annuities business, sales for the quarter were $650.3 million, up 47% from the year-ago quarter. Strong sales of both traditional fixed annuities and FIAs were driven by an improved interest rate environment and further expansion of Symetra annuity products on bank and broker-dealer distribution platforms.
Pretax adjusted operating income was $27.4 million for the quarter, unchanged from the previous period. Higher fixed indexed annuity (FIA) account values contributed $7.8 million to interest margin, up from $2.0 million in the prior-year period. This favorable impact was partially offset by higher operating expenses.
Earnings for the quarter included $1.9 million of investment prepayment-related income, net of related amortization, down from a net $3.3 million in the prior period.
Total account values were $14.3 billion at quarter-end, up from $12.2 billion a year ago. FIA account values reached nearly $2.5 billion, up from $852 million.
Income annuities
In Symetra’s income annuities business, sales were $89.0 million for the latest quarter, up from $45.5 million in the prior-year quarter. Effective selling strategies and a more favorable interest rate environment drove increased single premium immediate annuity (SPIA) sales, Symetra said in its release.
Pretax adjusted operating income was $3.5 million for the quarter, down from $10.0 million in the prior-year period, due to less favorable mortality experience and lower interest margin. Mortality gains were $0.8 million for the quarter, compared with mortality gains of $4.5 million in the previous period. Mortality experience can fluctuate from period to period.
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