Sun Life Financial Shows Biggest Gain in Net Premiums Written in 2009

Sun Life Financial Group and Jackson National Group showed the biggest gains in net premiums written in 2009 among the top 25 U.S. life/health writers, according to a recent A.M. Best Statistical Study.

The two companies were among just a few to buck the downward trend, as total net premiums written for the top 25 declined 26% in 2009 from the prior year to $276 billion, the study showed.

Ranked 23rd overall, Sun Life Financial showed the biggest gain -- a nearly 31% increase -- to $7.6 billion. Sun Life U.S. reinsured a block of corporate life insurance policies in 2008 to another legal entity so the premiums for Sun Life U.S. were unusually low in 2008. Sun Life Financial is based in Canada.

Terry Mullen, president of Sun Life Financial Distributors, said throughout the tough economic environment, Sun Life U.S. "has maintained its financial strength and focus on growth, attracting top talent to the organization and reinforcing our distribution partnerships."

Significant strides in productivity of wholesalers and a competitive product suite drove sales momentum throughout 2009, especially in the company's variable annuity product line, Mullen said.

Jackson National Group, in 18th place overall, showed the second-biggest gain -- a 29% increase -- to $14.2 billion. Jackson is an indirect subsidiary of Prudential plc of the United Kingdom.

Clifford Jack, executive vice president and chief distribution officer for Jackson National Life Insurance Co., said the company has always priced its products appropriately, "and did not compete on price to gain market share. As a result, we did not have to make drastic changes in the aftermath of the financial crisis."

Jackson National sold $10 billion in variable annuities during 2009, up from $6.5 billion the prior year. Sales of equity-indexed annuities exploded, increasing to $2.2 billion from $928 million in 2008.

"Advisers who in the past were not well versed in insurance company financials quickly got up to speed, and that resulted in a significant flight-to-quality across the annuity industry, which benefitted Jackson," Jack said.

Net premiums written for the total U.S. life/health industry stood at $464.6 billion, a 17.9% decline from 2008, the study shows.

Hartford Life Group, part of Hartford Financial, saw the biggest decline in net premiums written -- at 99.9% -- to negative $45.9 billion.

Michael R. Hazel, assistant vice president, finance operations and investment company reporting for Hartford Life Insurance Co., attributed the negative results to Hartford Life & Annuity Insurance Co. establishing a variable annuity captive reinsurer in 2009.

Upon the inception of the reinsurance agreement, the company ceded more than $58 billion of account value and reserves related to its direct and assumed variable annuity business, Hazel said.

The negative net premiums written primarily reflected a modified coinsurance and coinsurance funds withheld reinsurance agreement between Hartford Life & Annuity Insurance and affiliated captive reinsurer, White River Life Reinsurance Co., which took effect Oct. 1, 2009, said Richard Kirk, senior business information analyst at A.M. Best Co.

Genworth Financial Group, ranked 22nd overall, saw the second-biggest decline -- at 63.2% -- to $1.8 billion.

Genworth's decline was mostly due to Genworth Life & Annuity Insurance Co. ceding about $2.3 billion of ordinary life premium to several companies, Kirk said. Genworth Life Insurance Company of New York also experienced lower net premiums written due to lower individual annuity business, he said.

For Genworth, and for most writers in general, the fixed-annuity business is being managed on an opportunistic basis and has been de-emphasized, given low investment spreads, Kirk said.

No. 9-ranked ING USA Life Group showed the third-biggest decline -- at 36.4% -- to $16.9 billion.

The decline was due to reductions in virtually all lines of business, but primarily in the individual and group annuity lines, Kirk said.

Attempts to get comment from ING USA and Genworth were unsuccessful.