OLDWICK, N.J.--(BUSINESS WIRE)--The U.S. life/health industry performed favorably on a statutory basis in the first half of 2013, despite the prolonged low interest rate environment, continued macroeconomic and regulatory headwinds and general competitive pressures tied to the evolving marketplace. The industry’s statutory net operating earnings increased by almost 25% to $29.1 billion in the first half of 2013, compared with $23.4 billion generated during the same period in 2012. Total statutory net income reported for the first six months of 2013 increased by approximately 20% to $23.2 billion, compared with $19.3 billion for the same period a year ago. The year-over-year increase in operating earnings was due to favorable underwriting results, partially offset by realized capital losses, according to a special report by the A.M. Best Co.

While improved risk metrics drove some of the more favorable underwriting results in the first half of 2013, net investment income was flat compared with the same prior year period. The lack of investment income growth was primarily due to persistently low, albeit somewhat improved, interest rates as carriers looked for profitable investment options that adequately matched their company’s liability structure. The life/health industry’s invested asset base increased a modest 0.6% through the first half of 2013 to $3.53 trillion, as compared to the 2.3% growth in total assets, which is mostly attributable to a 5.2% increase in separate account assets. Although insurers have been looking to enhance portfolio yields, the allocation of investments among asset classes has remained relatively consistent from prior periods.

To access a copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=218024&AltSrc=26.

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