Midsize Annuity Issuer Might Put Itself Up for Sale

It reported $12 million in net income for the first quarter on $153 million in revenue, compared with $98 million in net income on $138 million in revenue for the first quarter of 2022.

The new Long-Duration Targeted Improvement accounting rules now require life insurers to put the effects of estimated changes in the value of life insurance and annuity product benefits obligations in current earnings. That “mark to market” requirement cut $40 million from the company’s earnings this quarter, after adding $61 million to earnings in the year-earlier quarter.

New sales of life insurance dropped to $24 million, from $39 million, because of the effects of the COVID-19 pandemic on efforts to recruit insurance agents, and new sales of annuities dropped to $32 million, from $88 million.

Annuity sales dropped because National Western Life has focused on offering annuities aimed at clients who want income, and conditions in the first quarter favored issuers of multi-year guaranteed annuity products aimed at clients who want to maximize accumulation value, the company said.

National Western Life introduced the more favored products in late 2022, and it began to sell some of those products in the first quarter, the company added.

(Photo: Nicky Loh/Bloomberg)