In what is very good news for those of us who depend on life insurance and annuity companies to provide the products for structured settlements, Prudential Financial and Allstate each posted strong earnings in the last quarter, indicating that the stress of last year may finally be over.
Prudential Financial reported earnings of $538 million for the quarter, with strongest profit growth in their variable annuity and life insurance sales. This continued strength in core products should help stabilize concerns over potential rating drops or a need to raise capital. It also gives those of us who sell structured settlements some breathing room and much-needed good news compared to the last 18 months of trauma.
Allstate earnings exploded from $25 million in the same quarter last year to $389 million in the second quarter of 2009. As we know, the Allstate structured settlement division is on a short leash for the remainder of 2009 due to capacity and case size restrictions. They also terminated their medical underwriting that was likely designed to focus premium into core, moderate size, internally-written structures. It looks as if the steps taken early this year are working. So, much as with Prudential, Allstate now has some breathing room and profits that should lessen rating company concerns and the need to raise capital.
We need all the good news we can get and this is certainly good news.
Now, if we could just get Prudential back into the non-qualified annuity market and get Allstate to lift their capacity/case caps, we might be able to really sell some product!