Mr. Binner: EPS came in relatively in line, around 11% growth. That is in line with the industry's historical 10 CAGR on EPS, which is around 10%. I think the highlight continues to be, at least from an earnings perspective, international operations. This is across investment product categories, like variable annuities and asset management, but also life products, where operating earning were up in the neighborhood of about 18%. Whereas, with life products you generally saw low teens, and accident and health were more in the mid-teens. The highlight really was the power of international operations to provide more growth into what is otherwise a steady state industry. Overall, I think the 2007 result ended up being quite adequate. There is going to be more volatility, both with the income statement and balance sheet looking at 2008.
TWST: Colin, what was your take on 2007?
Mr. Devine: I thought all in all it was a generally satisfactory year. The group
held up well relative to pretty much every other sector in financial services.
It certainly remains a safe "port" within the financial storm. Leading the way
was variable annuity sales that were up over 15% for the year, and even stronger
than that for the leading carriers. That was very encouraging. International
also remains a key area of strong growth even though several companies are
starting to see that slow in countries like Japan, as the domestic market there
is becoming a lot more competitive. The bottom line for us is that the life
insurance sector is a growth industry. It is not the mature one many investor
perceive it be. Certainly the demo-graphics tied to an aging society and their
post-retirement financial needs are compelling. With the demonstrable emergence
of demand for guaranteed retirement income products at the consumer level, I
think we are on the cusp of a very strong multi-year trend. That bodes well for
the industry and, quite frankly, I think the best is yet to come for the life
insurance business.
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