Total assets under management (AUM) rose 10% to $96.7 billion at Dec. 31, 2013 from $87.6 billion at Dec. 31, 2012 due to 15% growth in Mutual Funds AUM during that time period, partially offset by a 1% decline in Annuity AUM, as a result of surrender activity on the company's U.S. VA block.

Mutual Funds AUM increased due to strong sales and market appreciation, partially offset by redemptions. Mutual Funds sales rose 13% to $3.6 billion from $3.2 billion in the fourth quarter 2012 while net outflows improved to $0.4 billion, compared with $1.1 billion in fourth quarter 2012.

TALCOTT RESOLUTIONFourth Quarter 2013 Highlights:
  • Japan VA and U.S. VA policy count declined 26% and 14%, respectively, in 2013, reflecting a permanent reduction in risk
  • Japan VA and U.S. VA annualized full surrender rates of 42% and 15%, respectively
  • Completed the sale of the U.K. VA company to a subsidiary of Berkshire Hathaway in December 2013
TALCOTT RESOLUTION              
($ in millions)       Three Months Ended
        Dec. 31 2013     Dec. 31 2012     Change
Core earnings       $173     $202     (14%)
Net loss       $(15)     $(148)     90%
U.S. VA annualized full surrender rate 1       14.5%     10.4%     4.1
Japan VA annualized full surrender rate 1       41.5%     3.7%     37.8
U.S. VA account value       $61,812     $64,824     (5%)
Japan VA account value       $20,130     $27,716     (27%)

[1] Full surrender rate represents full contract liquidation; excludes partial withdrawals

Talcott Resolution fourth quarter 2013 core earnings were $173 million, a 14% decrease compared with $202 million in fourth quarter 2012 due to the loss of earnings from sold businesses and the continued runoff of the annuity block, partially offset by lower DAC amortization expenses and favorable investment income from limited partnerships and other alternative investments. Fourth quarter 2012 core earnings from the Individual Life and Retirement Plans businesses that were sold in January 2013 totaled $43 million.

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