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Life insurance companies ready for analysts to pick apart Q1 earnings – Insurance News

  • May 2, 2023

First-quarter earnings will reveal how well insurance companies are adapting to higher interest rates and taking advantage of a strong annuity sales environment.

Earning season takes off this week with some major life insurance companies reporting results, including Prudential and American International Group. Earnings calls with insurance executives should shed further light on sales trends, as well as changing investment decisions and the industry’s growing technology commitment.

But the underlying economic indicators remain troubling to some degree.

“Corporate America faces some of the same headwinds it did during fourth-quarter earnings season, including slow global economic growth, cost pressures from still-elevated (but easing) inflation, some currency drag from a stronger U.S. dollar last quarter compared with the year-ago quarter, and geopolitical instability, particularly in Eastern Europe and China, that has put some upward pressure on costs,” wrote Jeffrey Buchbinder, chief equity strategist for LPL Financial.

Rate hikes help bottom line

The Federal Reserve is expected to raise its benchmark interest rate for the 10th time on Wednesday. Another quarter-point rate increase on Wednesday would leave the Fed’s key rate at 5.1%, a 16-year high and a full 5 percentage points higher than in March 2022.

A significant portion of insurance companies’ investment portfolios are interest-rate dependent. An investment asset base, couple with secondary investments in real estate, hedge funds and other sources, means insurers are could see substantial earnings from the interest rate hikes to date.

Life insurers are tailoring offerings to take advantage of the consumer rush to protection-focused products. Likewise, they are tailoring products to cover a variety of living benefits such as critical illness and long-term care.

As a result, LIMRA is forecasting record-level sales in the $300+ billion range for the next several years.

Several insurers are also in the midst of expense-cutting efforts. Increasing investments in

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Edmunds: Car shopping trends and tips for 2023

  • February 27, 2023

Shopping for a new or used car over the last few years has become a frustrating and expensive undertaking. Car shoppers have had to deal with vehicle shortages, high prices, dwindling incentives and rising interest rates. Will 2023 bring any relief? Yes and no.

“Many buyers exited the market due to inventory issues or pricing that was not what they were expecting,” said Ivan Drury, Edmunds’ senior manager of insights. “While some of those issues will subside for 2023, current buyers will face a new set of challenges. The cost of financing continues to climb, which can offset some of the discounts from the manufacturer’s suggested retail price.”

The experts at Edmunds have gathered five important issues you need to know about the current car-buying climate, plus tips on how to make the best of them.

INTEREST RATES ARE HIGH AND STILL RISING

According to Edmunds data, the average annual percentage rate, or APR, on new financed vehicles climbed to 6.5% in the fourth quarter of 2022, up from 4.1% in Q4 2021. For used cars, the average APR climbed to 10% in the same timeframe, up from 7.4% in 2021. Experts are predicting that the Federal Reserve might have a couple more rate hikes in store for this year, so this situation isn’t likely to improve in the coming months.

Tip: Get preapproved for an auto loan with your local bank or credit union. A preapproval allows you to compare rates offered by a dealership. Lower APRs can be found through the automaker’s finance arms, though the loan may have a shorter term than expected. And while it might be tempting to take a longer loan term to drop the monthly payment, keep in mind that you’ll be paying more for the car over time due to the

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