Cigna Exiting Run-Off Variable Annuity Business
Fran Lysiak |
A
Under the agreement with Berkshire Hathaway Life Insurance Company of
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During the height of the 2008 financial crisis amid sharply declining and volatile stock markets, U.S. life insurers faced hits to profits in their variable annuity businesses. Factors fueling the problems included lower fee income from managing clients' assets; big charge-offs on the cost of acquiring new business and higher hedging costs. At that time, industry watchers were eyeing whether companies would be forced to boost reserves for these retirement-income products to ensure they could deliver on the guaranteed future payments to policyholders (Best's News Service,
Realized capital gains resulting from the sale of investment assets supporting the business will range between
Full-year 2012 shareholders' net income increased to
Consolidated 2012 revenue increased to
Over the years, life insurers added various features to variable annuities, intended to protect policyholders against downside equity market risk. These included the guaranteed minimum death benefits and living benefits, such as guaranteed minimum income benefits. However, de-risking has been the key word for the industry since 2008. Amid volatile markets, some writers have cut policyholder benefits to reduce their own financial exposure while others have completely exited the market.
Berkshire Hathaway Life Insurance Co. of
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Copyright: | (c) 2013 A.M. Best Company, Inc. |
Source: | A.M. Best Company, Inc. |
Wordcount: | 634 |
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UNIFIED GROCERS, INC. – 10-Q – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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