The Top 200.

Net premiums for the life/health industry grew 8.6% in 1999.

The universe of 1,118 life and health insurance companies increased net premiums written 8.6% last year to $493 billion, compared to a four-year compound annual growth rate of 7.6% at year-end 1998. Net premiums for the 200 largest groups, which account for nearly 99% of the industry total, increased 6.5% to $488 billion.

This year, departing from the traditional approach of ranking individual companies, Best's Review compiled the net-premiums-written ranking based on group results.

The growth in net premium written over the past several years has been driven to a large extent by annuity deposits and sales of corporate-owned and bank-owned life insurance, said Cynthia Crosson, senior financial analyst, A.M. Best Co. That trend continued in 1999, with the exception of bank-owned life insurance, which dropped off significantly among large writers due in part to pricing pressures.

Cincinnati Life Insurance Co. was an exception. Helping to propel the company to a 282.3% increase in net premium written was the sale, in late December, of a $302.9 million single-pay life policy on one bank's officers. That sale put parent company Cincinnati Financial over the top of its $2 billion goal for direct written premiums for property/casualty and life insurance.

Another factor that was expected to affect net premium was the advent of Triple X, formally known as The Valuation of Life Insurance Policies Model Regulation. This regulation is designed to ensure that insurers set aside enough reserves to cover claims on life insurance policies. Triple X reportedly drove a big jump in term sales in the fourth quarter of 1999. A survey of the top 15 writers, however, indicated that first-year direct term life premium grew a moderate 8% for the year.

ARM Financial Group Inc., Louisville, Ky., experienced at 65% drop in net premium written, the largest decline by percentage in 1999. The company filed a Chapter 11 liquidation plan in December, and in March, it sold its insurance subsidiaries.

Metropolitan Life Insurance Co. maintained its position as the leader in net premium written with a 9.8% increase to $27.1 billion.

Aegon USA Inc. jumped into second place from fourth on the strength of its $9.7 billion acquisition of Transamerica Group.

Lincoln National Corp. dropped from 6th place in 1998 to 23rd a year later. The insurer did not experience a real drop in premium. Instead, the company's 1998 net premium written was artificially inflated due to block acquisitions from Cigna Corp. and Aetna Inc., and this resulted in the decline in 1999.