Kansas City Life Insurance Company posted a net loss of $1.2 million ($0.13 per share) in the third quarter, compared to a net income of $4.5 million ($0.47 per share) in Q3 2019, the company has announced. Net income totaled $15.9 million ($1.64 per share) in the first nine months of 2020, up from $13.8 million ($1.43 per share) in the same period of 2019.
The biggest driver in the decrease was increased policyholder benefits, primarily due to higher death benefits, Kansas City Life said. Lower net investment income and increased amortization of deferred acquisition costs also contributed to the drop. The decrease was partially offset by increased premiums, net of reinsurance, higher net realized investment gains, and lower operating expenses.
The largest driver of the improvement in net income in the first nine months of the year was the opportunistic sale of an industrial real estate property, which generated a large investment gain, Kansas City Life said. An increase in insurance revenues and a drop in operating expenses also contributed to the rise. The jump was partially offset by a decrease in net investment income and increases in amortization of deferred acquisition costs and policyholder benefits compared to 2019.
“The COVID-19 pandemic continues to impact our financial results for both the third quarter and the first nine months of 2020,” Kansas City Life said. “These impacts include a negative impact on mortality experience that has contributed to higher policyholder benefits and increased financial market volatility.”