Annuity FYI Blog

For more than twenty years, research and consulting firm Dalbar has come up with a list of the companies offering the best annuity service.  Their list for 2011 includes both big and small names, but all of the winners have the best customer service in the industry.  This year’s Annuity Service Awards go to AXA Equitable-Equivest, Prudential Financial, Pacific Life, New York Life, SunAmerica Annuity and Life Assurance Company.  Dalbar’s press release, “Dalbar Announces Its 2011 Annuity Service Award Winners in Financial Services,” lists the winners and the criteria for having the best annuity services.  Thousands of tests are done over the course of each year looking into the customer service at these annuity companies.

The industry only averages a 69% friendly engagement when customers initially call the company.  The service award winners are friendly and let their customers know they are appreciated 95% of the time, in comparison.  Annuities are complex products, and making sure that customers understand their product and are comfortable with all aspects is crucial.  Annuity award winners make sure their clients know all of the details from an expert and follow up with them 85% of the time, while the industry as a whole only does it about half of the time.  These companies are also all consistent with their superior treatment of customers and their company practices.  Since this award was introduced 15 years ago, New York Life has won it 12 times and the other winners have all won between 5 and 11 times.

Written by Rachel Summit

Follow Finance Mama on Twitter http://twitter.com/#!/financemama

After a period of time where variable annuity products that were fee-based had a bad reputation, some of the biggest annuity companies are revamping the products.  Reuters Linda Stern discusses this new trend in her article “Analysis: New fee-only annuities aim to move upscale.”  More advisors are changing to fee-only practices now and insurance companies are making new products to attract them.  Retirement security has become more important than ever before during the past few years causing investors to change their willingness to pay more for better guarantees, like those offered with annuities.  More affluent investors tend to use fee-only advisors and they really appreciate the tax-deferral that comes with a variable annuity.

No-load, or fee-only, variable annuities are a very small portion of the total variable annuity market, but they are increasing yearly.  This year’s sales are expected to be 22% higher than sales in 2010.  Some of the big name companies introducing new fee-only variable annuity products include Allianz Life, AXA Equitable, Prudential, Lincoln National, and Sun Life.  In addition to the appeal of deferring taxes on all growth in the variable annuity, death benefits are another popular option for investors in these products.  Even fee-only variable annuities where you don’t pay commission are not right for everyone.  Depending on the mutual funds the annuities are tied to, your fees could be as much as commission on a basic variable annuity.  As with many annuities, getting past the preconceived notion the name carries can be the biggest hurdle for those who don’t understand all the benefits that come with a variable annuity.

According to TMC Net, AXA Equitable has introduced a new application for Blackberry smartphones that will make annuity transactions easier.  Jyothi Shanbhag’s article “Business Mobility: AXA Equitable Releases Financial Super Apps for Blackberry Smartphones” says that the apps include annuity products, life insurance, and other products sold by AXA Equitable.  Their new calculator app, called the Retirement Income and Life Insurance Interactive calculator, was made to help investors plan their future more easily.  It helps you determine the amount of money you’ll need to save for retirement and estimates how much life insurance you should carry.

AXA thinks that these Blackberry apps will help investors to be more knowledgeable about their finances, not to mention more hands-on.  The newest apps can be synchronized with your address book, so when you are in the application you can call or e-mail your advisor immediately with questions about fixed annuity rates or anything else.  Through the calendar application, advisors can remind investors of upcoming appointments or even reaching certain financial goals.  Back in 2009, AXA introduced some important financial apps for the iPhone and these latest Blackberry apps are just expanding their offerings.  They have information regarding saving for college, retirement shortfalls, life insurance, life expectancy and annuity products.

LIMRA just released annuity sales results from the fourth quarter of 2010 and the total year results, according to Ruthie Ackerman’s article in the Financial Times. “Who Were the Top 20 Annuity Writers in 2010?” summarizes the top sellers.  Total annuity sales were published along with totals for sales of variable annuities and fixed annuities.  Of the top 20, half of them had sales increases over the previous year.  The top three sellers of variable annuities reached sales records, while 70% of the top variable annuity companies saw overall sales increases in 2010.

Prudential Annuities had both the most annuity sales and the highest sales for variable annuities.  They were number one with total annuity sales of $23.3 billion and variable annuity sales of $21.7 billion.  They were fourteenth in their sales of fixed annuities.  Allianz Life of North America sold the most fixed annuities, selling $7.1 billion.  They came in seventh in total annuity sales and thirteenth in variable annuity sales.

The top 20 companies accounted for 80% of total annuity sales, 93% of variable annuity sales, and 74% of fixed annuity sales.  Rounding out the top 10 companies in total annuity sales after Prudential were MetLife, Jackson National Life, TIAA-CREF, AIG Companies, Lincoln Financial Group, Allianz Life, New York Life, RiverSource Life Insurance, and ING.  Many of the top 10 annuity sellers also made the top list for variable annuities and fixed annuities.  In addition to those already mentioned, AXA Equitable and Nationwide Financial were in the top 10 for variable annuities.  For fixed annuities, AVIVA, American Equity Investment Life, and Great American were also in the top 10.  LIMRA’s report shows the entire top 20 list for each investment.

AXA Equitable Life Insurance Company has a new financial training program called “Cracking the Code,” according to PR-Canada.  AXA Equitable’s unit for annuity wholesale distribution, AXA Distributors, LLC, created this curriculum for professionals to continue their retirement income planning education.  The materials for self-study and presentations have been approved for continuing credits in 49 states.  Since growing savings before retirement is only half of the big picture, investors are looking to their financial advisers to help them make decisions that will keep them financially secure throughout their lifetime.  “Cracking the Code” aims to help advisers guide their clients from pre-retirement all the way into the asset distribution phase.

The “Cracking the Code” guidebook takes financial professionals through all the necessary steps to help their clients through retirement.  It explains how a client’s personal savings works into their retirement plan and information about IRA use.  There is also information regarding Social Security and Medicare benefits that affect retirees.  There are different strategies for dealing with risk including using the best annuities and other financial retirement products to guarantee future income streams.  Advisers will receive information about running a successful practice, such as help with marketing and time-saving tips.  With the use of AXA’s “Cracking the Code” information, advisers can be better equipped to help clients with every aspect of their retirement plan.