Date posted: August 18, 2012
The second quarter numbers are in and Sheryl J. Moore has compiled a list of the best in the indexed industry. According to Insurance Networking News’ Carrie Burns, the “Top 10 Q2 Indexed Annuity and Life Insurance Carriers” have been released in a new report. Annuity Specs’ 60th “Indexed Sales & Market Report” accounts for the production of 99% of all of these indexed products. Moore, the author of the report, is the CEO and President of Moore Market Intelligence. Indexed annuity sales increased 8% from the first quarter of this year to the second quarter, for a total of $8.7 billion. Indexed life insurance sales went up 19% to $303 million.
Allianz Life Insurance Company took the top spot in fixed equity indexed annuity sales for the second quarter. Aviva, American Equity, Security Benefit Life, and GAFRI rounded out the top five. Some companies were a bit of a surprise in this top 10 list, while others were expected and typically have the highest indexed annuity sales. The remaining companies in the top 10 were Fidelity & Guaranty Life, Midland National Life, Jackson National Life, Lincoln National Life, and North American Company for Life & Health.
Some of the same companies made the list of the top 10 indexed life insurance sellers in the second quarter. At the top of that list was Aviva, followed by AXA Equitable and Pacific Life Companies. The next highest sellers of indexed life insurance were AEGON Companies, National Life Group, National Western Life, and Allianz Life. Finishing out the top 10 list were Penn Mutual, Minnesota Life and American General Life Companies. Based on the growth that we have consistently seen in the indexed annuity and indexed life markets, it is likely that the products will remain strong this year and into the future.
Date posted: November 4, 2011
American Equity Investment Life Holding Co. had to lower their interest rates recently for the first time since 2007. Low interest rates in this volatile financial market have been really hurting the company’s spread, so they lowered new annuity rates by .4 to .5% in October. The difference between the interest they were paying out and that which they were receiving was too high not to make a change. Annuities renewing after November 14 will also get interest rate reductions, according to the Des Moines Register’s “Chaos in financial markets aids American Equity, yet it will cut rates,” by Adam Belz.
But American Equity did see increasing sales of annuities, especially the fixed equity indexed annuities in which they specialize. Sales of annuities increased every month last quarter, with a high in September of $462 million. Their third quarter operating profits increased 50% from 2010, to $41.5 million. Consumers were buying annuities in large numbers because of their safety and security in a volatile market. Despite increased operating profits, American Equity had an overall loss of $13.1 million in the third quarter, prompting their decrease in annuity rates.
Written by Rachel Summit
Date posted: July 31, 2011
American Equity Investment Life Holding Co. CEO Wendy Waugaman was interviewed in the Des Moines Register article “W.D.M. firm’s CEO talks of annuities, economic growth.” American Equity has the second highest sales of fixed equity indexed annuities, just above Aviva USA and behind Allianz Life. The company was started in 1995 and went from selling $150 million of annuities in 1997 to $2 billion in 2001. Their revenue is now up to $28 billion, largely based on sales of fixed equity indexed annuities. Investors look to annuities even more in volatile markets and for good reason. If you had purchased a fixed annuity in 1998 from American Equity for $100,000; the 2010 value would have been over $160,000. In comparison, the same investment in an S&P fund would have been worth just under $109,000.
These guaranteed interest rates make annuities very popular, especially as 401k annuities purchased with some of a retiree’s 401k plan. Waugaman answered questions about everything from annuity basics to the inner workings of American Equity. When asked how American Equity makes money from annuities, she says that it is similar to a bank loaning your money to other people while paying you interest. She says that they are growing faster than other annuity companies because of their excellent customer service to both agents and investors. After being asked about interest rates, she was honest and said that they are frighteningly low. She is hopeful that they will gradually increase so that they can offer higher immediate annuity rates and America can come out of the financial crisis. American Equity has hired 80 people over the last six months and they have been in every area of the business. American Equity is poised to retain their high position in the fixed equity indexed annuities market.
Date posted: July 19, 2011
Allianz Life Insurance Co. of North America introduced a new preferred distribution program last week that those left out of the program are unhappy with. According to Darla Mercado of Investment News in the article “Allianz Preferred perks strike nerve with agents,” agents and marketing groups who are not included in Allianz Preferred are worried that they will lose clients or agents within their groups. The program gives extra support to top sellers of Allianz’s fixed equity indexed annuity products. Allianz Preferred offers these top field marketing organizations some special products and more support and in turn, they allow Allianz increased oversight of their organization. Allianz says that they want to make sure the companies who represent them best are thriving and getting the resources to improve in the marketplace.
The annuity market could see some changes because of Allianz Preferred, since agents and marketing groups could look specifically for FMO’s who are part of this preferred group. Some critics of the program think that the $75 million of Allianz annuities that FMO’s must sell to be in this preferred group is too high. Others worry that compliance officers hired by Allianz to look into the materials related to competitors’ annuities may not be in the best interest of the consumer looking to compare annuities. Allianz is already the top indexed annuity seller with 21% of the market and this move may make it nearly impossible for its top competitors, like American Equity and AVIVA USA, to catch them. The 25 or so organizations who will be part of this preferred program are excited for all of the benefits, and even for the opportunity to recruit agents whose organizations are not eligible.
Date posted: June 9, 2011
Fixed annuity sales increased 6% in the first quarter of this year to a level of $18.9 billion. The Annuity News Journal article; “Sales of Fixed Annuities are Making a Comeback” by Zachary Dristol, says that sales increased in all four types of annuities. Book value annuities increased by 12%, moving to $8.6 billion in assets. Market value adjusted annuities increased by 7% and income based annuities increased by .8%. While there was only a minimal .2% increase in indexed annuity products, their increases over the past year or so have been so significant that the assets are still very high.
From the fourth quarter of last year to the first quarter of this year, book value annuity assets increased by 42%. In the same time frame, annuity sales in general increased by 7%. Beacon Research’s CEO said that increasing annuity rates during the first quarter were likely the reason for the fixed annuity sales increase. In comparison to fixed and variable annuities, indexed annuity products lost some ground probably just due to seasonal changes. After the financial crisis of 2008, the annuity industry worked hard to distance itself from AIG and be seen for their guaranteed retirement income again. The top five annuity sellers in the first quarter were Western National, New York Life, Allianz, American Equity, and Aviva.