American National Insurance Co. has announced its decision to discontinue the sale of new life insurance policies, redirecting its focus toward expanding other areas of its business portfolio. These areas include annuities, pension risk transfer, and property and casualty insurance.
Key Dates and Details: The company has set May 31 as the last date for submitting new life insurance applications, with all policies required to be finalized by July 31. Although new sales are ceasing, existing life insurance policies will continue to be serviced without any disruption.
A spokesperson highlighted that this strategic pivot is aimed at concentrating on sectors with anticipated long-term growth potential. According to American National’s 2024 financial report by AM Best, the company faced a net loss of $243.4 million. The report also revealed negative net premiums earned (NPE) amounting to $2.09 billion in individual life and $68.8 million in group life policies.
In contrast, the company’s performance in the annuities sector was notably better, with individual annuities achieving an NPE of $202.9 million, and group annuities reaching $433.6 million.
Apart from life insurance, changes have also been made to American National’s property and casualty operations. In 2023, the company announced its exit from the homeowners insurance market in nine states, including California and Louisiana. Other states impacted are Arkansas, Colorado, Minnesota, Oklahoma, South Carolina, South Dakota, and Washington. The decision was driven by ongoing profitability challenges within these markets.
In 2022, American National was acquired by Brookfield Asset Management Reinsurance Partners Ltd. for $5.1 billion, marking a significant shift in its corporate structure.
Despite American National’s voluntary realignment, other life insurers in the US have been compelled to halt new policy issuances due to financial and regulatory challenges. For instance, Atlantic Coast Life Insurance Company and its captive reinsurer, Southern Atlantic Re, were directed by the South Carolina Department of Insurance to stop issuing new policies by Dec. 31. This order was due to concerns over their negative surplus levels and ability to fulfill policyholder obligations.
Similarly, in Utah, Sentinel Security Life Insurance Company, along with its affiliates Haymarket Insurance Company and Jazz Reinsurance Company, were advised by the Utah Insurance Department to cease new business after Dec. 31. The directive was based on their precarious financial status, insufficient capital to cover liabilities, and significant investments in high-risk assets associated with their parent company, Advantage Capital Holdings.
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