Among the largest publicly traded US life insurers, only Voya Financial Inc. and Prudential Financial Inc. were able to achieve year-over-year growth in total revenue during the first quarter.

Prudential's revenue soared by 43.8% year over year in the period while Voya's grew by 21.8%.

The quarter was also notable for being the first under the new long-duration targeted improvements (LDTI) accounting standard that many companies had to transition to as of Jan. 1, 2023. All earnings comparisons in this analysis are made using insurers' recast results under LDTI from the first quarter of 2022 unless otherwise stated.

Revenue drops

Jackson Financial Inc. and Corebridge Financial Inc. were among the companies with the largest year-over-year decreases in total revenue. The former reported a negative total revenue of about $750 million in the first quarter of 2023, which was reflective of a net hedging loss, compared to $2.22 billion in revenue in the prior-year period. Corebridge's first-quarter revenue decreased by almost $3 billion year over year, tumbling to $4.26 billion from $7.24 billion in the first quarter of 2022.

LDTI impacts

The LDTI accounting standard significantly changes the accounting and disclosure requirements for long-duration insurance contracts. Companies are now required to review and update cash flow assumptions used to measure liabilities for future policy benefits for traditional and limited-payment contracts at least on an annual basis.

Jackson Financial experienced the largest total negative impact on revenue as a result of LDTI. The company originally reported $4.3 billion in revenue for the first quarter of 2022 under the previous standard, as compared to the $2.22 billion it now records for the period.

However, LDTI had a positive impact on a majority of the companies in this analysis; all but Principal Financial Group Inc. reported lower expenses due to the impact of the accounting standard.

Restated first-quarter 2022 net income for most of the US life insurers in this analysis exceeded originally reported results. Just three companies — Prudential, Corebridge and Principal Financial — reported lower net income after results were recast.

In an interview, Equitable Holdings Inc. CFO Robin M. Raju said LDTI had enhanced the financial reporting process, made more disclosures available to investors and ultimately expanded "transparency and trust."

Earnings fall, except for Aflac

Life insurers almost across the board saw earnings fall year over year in the first quarter, with only Aflac Inc. showing improvement.

Aflac booked EPS of $1.62 in the first quarter, up from $1.44 in the year-ago quarter. During Aflac's first-quarter call, company executives said the company is seeing pressure in commercial real estate and expects up to $500 million worth of commercial mortgage loans to enter into some form of foreclosure. However, executives pointed out that even in a severe downturn, Aflac's exposure in the office segment is "manageable."

Brighthouse Financial Inc. had the greatest drop in EPS for the period with $2.86 reported in the first quarter, down from $4.91 in the first quarter of 2022.

– Read our newly released Insurance Investments Market Report.  – Read our US life insurance earnings recap for the fourth quarter of 2022.