Life, Health Insurers' Profits Decimated

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Life and health insurers' profits were all but wiped out in the first half of the year, according to a quarterly review of the nation's 1,000 insurers. The industry earned a mere $370 million in the six months through June, down 98% from $21 billion in the same period in 2007.

Seventeen AIG(AIG Quote) insurers contributed nearly half, or $9.5 billion, to the year-over-year decline. The 17 affiliates lost a combined $6.6 billion in the first half, compared with a $2.9 billion profit in the first half of 2007. American General, composed of AIG's seven domestic life insurers, came under fire in Congress last week for holding an expensive junket soon after AIG's mid-September government bailout. The unit lost $2 billion in the first half.

Conseco Life Insurance of Texas, a unit of Conseco Group(CNO Quote), contributed $1.5 billion to the decline, but this drop was primarily due to the divestiture of the unit's Bankers Life subsidiary. Conseco Life of Texas lost $20 million in the same period last year. ...