In the first three months of 2024, total revenues in the U.S. life and annuity insurance market rose 16% to $303.2 billion, compared to $261.4 billion a year earlier, according to ratings agency AM Best.

This significant increase is due to a 20.5% increase in premiums and pension payments, a 43.6% increase in other income and an 8.4% increase in net investment income, totaling $227 billion, $16.4 billion and $55.8 billion, respectively.

Meanwhile, the US life and annuity insurance market saw net income decline 80.4 percent over the same period, falling to $1.6 billion from $8.1 billion a year earlier.

The rating agency noted that a 20% increase in total expenses for the period hurt the industry’s net profit. The 20% increase was largely due to a $40.9 billion increase in redemptions and other benefits.

Capital and surplus decreased slightly to $499.5 billion from the end of 2023, as net income, change in unrealized gains, contributed capital and other changes in surplus decreased by $8.9 billion by $6.6 billion.

In addition, cash and short-term investment holdings declined 2.4% from the end of 2023 as investments in other assets and mortgage loans increased. AM Best found that the mortgage loan asset class now accounts for 13.6% of total invested assets.