OLDWICK, N.J.--(BUSINESS WIRE)--
The U.S. life and annuity sector has maintained strong risk-adjusted
capital, generated steady GAAP and statutory operating earnings,
improved balance sheet fundamentals and enhanced risk-focused decision
making by company management, according to a special report by A.M.
A.M. Best notes that the benign credit environment, combined with
significant de-risking of life companiesí investment portfolios, has
resulted in most insurers reporting relatively modest investment
impairments in 2013. Meanwhile, they have maintained net unrealized
gains in their fixed-income portfolios with only minor pockets of
unrealized losses. A.M. Bestís rating outlook for the U.S. life and
annuity sector remains stable.
In January 2013, a political stalemate with the potential for an
unfavorable resolution of the fiscal cliff threatened to push the U.S.
economy back into a recession. Fortunately, cooler heads prevailed, and
for the next year, economic indicators and the equity markets steadily
advanced. Considerable hiring over the August-December period reduced
the U.S. unemployment rate to a five-year low of 6.7%, which is an
encouraging sign that the U.S. economy has stabilized. The Dow Jones
Industrial Average reached an all-time high at the end of 2013, up 26.5%
from year-end 2012. Automobile and home sales are surging, manufacturing
is gaining, and the trade deficit is narrowing. Also, real gross
domestic product jumped 4.1% in the third quarter (vs. the second
quarter) and 3.2% in the fourth quarter (vs. the third quarter), showing
strong momentum going into 2014.
To access a copy of this special report, please visit
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insurance rating and information source. For more information, visit www.ambest.com.
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A.M. Best Company
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Source: A.M. Best Co.