Date posted: August 31, 2009
Fixed annuity sales in the United States were $27.8 billion in the second quarter of 2009, according to a press release from Beacon Research. While the sales were a 20% decrease from the first quarter, they were 10% higher than the second quarter in 2008. From the highest sales to the lowest, the annuity products sold were book value, indexed, market value adjusted, and fixed income. All but one type were an increase from the second quarter in 2008. Indexed and income annuities were up from the previous quarter, while the other two types fell. Fixed annuities can be purchased with a 401k annuity transfer or an upfront one time purchase.
New York Life took over the top sales spot last quarter from MetLife. The rest of the top ten was as follows: Aviva USA, Allianz Life, AEGON/Transamerica, American Equity Investment, RiverSource Life, MetLife, Lincoln Financial Group, Jackson National Life, and Western National Life. New York Life maintained the top sales in both the book value and fixed income annuity products. The leading indexed annuity seller remained Aviva. The only change in leaders of the individual products was American National taking over the top sales spot of market value adjusted annuities. Beacon uses the sales results of 53 insurance companies which represent 86% of annuity sales to determine their findings.
Date posted: August 29, 2009
A Summer Crop of Variable Annuities
by Kerry Pechter, Retirement Income Journal
Published July 29, 2009
The styles of products of variable annuities introduced by insurers in July seem to fall onto opposite ends of the complexity spectrum. The AnnuityNote contract offered by John Hancock Life is a simple product with just one investment option and one comprehensive fee. “It was designed to resemble a mutual fund but with a true guarantee,” said Tom Mullen of John Hancock. MetLife launched a similar product, which differs especially in the number of investment options available.
On the other end of the spectrum is Allianz Life’s Vision, which replaced the old Vision rider that was discontinued in March. The new Vision is more complicated but also richer in benefits than the new products from John Hancock and MetLife, and it offers a more sustainable array of offerings than the old rider did. According to Allianz’s Jasmine Jirele, the pricing of the product reflects what the insurers have learned during the recent economic turmoil. Genworth also rolled out a more complex guaranteed lifetime withdrawal benefit rider, the Income Protector. Constrained with three balanced portfolios of various equity allocations, the rider offers a “surprisingly big roll-up [...] for those willing to wait 10 year after the contract date,” concludes Kerry Petcher, the author of the article.
For a link to the complete article, please click here.
Date posted: August 27, 2009
In “How to Beat Insurers At The Annuity Game,” John Girouard of Forbes gives you his best bet for getting the most out of variable annuities. When consumers purchase a variable annuity and begin receiving payouts immediately, many times that is in the best interest of the insurance company because some of the guarantees on the growth of your principal are lost. If the consumer waits to receive those payouts they likely will be the winner, instead of the insurance companies. Many variable annuities have a guarantee that the income base will double in ten years, which equates to an annualized compound rate of return of 7%. When making a 401k annuity transfer, all you have to do is leave your money for at least ten years, and you can reap great benefits.
For the consumers that did just that before the stock market rise and fall in the past 2 years, they are receiving the benefit of this guaranteed income growth. Unfortunately for some insurance companies that had heavy investments in these types of variable annuities, they have to find a way to recover from these hard hits. The guarantee with variable annuities is that your principal will not lose value if you haven’t started receiving income payments yet, even if the market were to collapse again. You also retain some benefits from the highest that the market was during your investment time frame. There are many different types of variable annuities and the products are not right for everyone. Consumers need to understand the benefits as well as the negative aspects and weigh those with the fees. A variable annuity can be a great way to win in the financial game.
Date posted: August 26, 2009
Variable annuity assets increased by the largest margin in 17 years in the second quarter of 2009, according to Andrew Frye of Bloomberg.com. His article “Variable Annuity Assets Advance Most in 17 Years,” lists the main reasons as a stock market rise and an increase in the amount that savers are investing. The total variable annuity assets reached $1.19 trillion to end the second quarter. This was a big help to the largest two life insurers, MetLife Inc. and Prudential Financial Inc. A 15% jump in the S&P 500 Index helped the funds backing these variable annuities remain strong.
The Insured Retirement Institute’s Cathy Weatherford believes that consumers will remain careful with their investments, even as the economy stabilizes. She thinks that 401k annuity rollovers and other annuity purchases will remain high as people continue to save and want to ensure their money is safe. With government money helping to stabilize the economic and housing markets, the home price index showed its first increase since 2006. The top provider of variable annuities, MetLife, had a 27% sales increase and Prudential had a 23% increase. Variable annuity sales are surging as markets increase and consumers seek good investments. See if they are right for you by contacting an expert.
Date posted: August 24, 2009
In “A Chat with Jackson’s Clifford Jack,” Kerry Pechter of the Retirement Income Journal interviewed Jackson National Life’s Executive Vice President, Clifford Jack. Jackson is one the U.S.’s top fixed and variable annuity issuer. With a Moody’s rating of A1 (Good) and $3.4 billion in retail sales and deposits for this year’s second quarter, they are having a record year amidst marketplace turmoil. Jackson was ranked eighth as a variable annuity provider in the first quarter of 2009, jumping ahead of big names Hartford Life, Pacific Life, AIG, and RiverSource Life. They have succeeded with 1035 exchanges, with a 23% yearly increase in annuity net flows from the first half of 2008 to the first half of 2009.
EVP Clifford Jack explains why you should make a 401k annuity transfer or find another way to purchase an annuity from Jackson. He attributes their success to the quality and consistency in both the product and message that Jackson delivers. They did not receive any public or raised private capital during the financial crisis because they already had a strong balance sheet and wise investments. Jack says that variable annuities have provided better security overall in the past year and that because of this, Jackson has seen a large increase in the number of advisers coming to them for their quality products. Their marketing has shifted focus to financial due diligence. Jackson’s main goal for the future is to continue what they have been doing. They don’t want to change their business philosophy when it is working well for the company and its consumers.