Mortality Is Still Running High, Globe Life Tells Wall Street

What You Need to Know

Ameriprise variable annuity sales increased to $1.1 billion, from $923 million.
Globe Life reported higher net income on higher revenue.
Globe Life executives implied that excess mortality may now amount to less than 1% of death claims.

Executives at Ameriprise Financial and Globe Life are happy with their companies’ life insurance and annuity operations — and the U.S. death rate is still a bit higher than it was before early 2020, when the COVID-19 pandemic showed up.

The companies started life and annuity issuers’ third-quarter earnings release season Wednesday, and the executives briefed securities analysts on the results Thursday, during conference calls that were streamed live and online.

Ameriprise Chief Executive Officer Jim Cracchiolo said demand for the company’s registered index-linked annuities and variable annuities without living benefits guarantees was strong. “Sales were up 18% from a year ago,” he said.

Tom Kalmbach, the chief financial officer of Globe Life, touched on the matter of life insurance claims. “We’re continuing to see excess mortality even in the third quarter,” he said. “It is better than what we assumed. But we still expect to see some excess mortality in 2024.”

What it means: Life and annuity issuers are doing well, and the lingering effects of COVID-19 are not big enough to have much effect on the companies’ earnings, but the increased mortality is adding a somber note to the earnings calls.

Ameriprise: Ameriprise, a diversified financial services company, reported $872 million in net income for the third quarter on $3.9 billion revenue in revenue, compared with $1.1 billion in net income on $3.5 billion in revenue for the third quarter of 2022.

At the Minneapolis-based company’s advice and wealth management unit, adjusted operating total net revenues increased to $2.4 billion, from $2.2 billion.

Distribution fees fell to $559 million, from $579 million, but advisory fees increased to $1.2 billion, from $1.1 billion, and financial planning fees increased to $102 million, from $97 million.

At the Retirement & Protection Solutions business, which sales the life insurance and annuities, adjusted operating total net revenues rose to $876 million, from $783 million, thanks in part to a boost from higher interest rates. The unit’s net investment income climbed 42%, to $215 million.

Variable annuity deposits rose to $1.1 billion, from $923 million, and life insurance policyholder reserves increased to $15 billion, from $14 billion.

Life insurance coverage in force held steady at about $198 billion, and net amount at risk per life fell 4%, to $37,917.