Date posted: October 5, 2012
Deferred income annuities, or longevity insurance, are being introduced by more and more mutual insurance companies. These annuities are becoming increasingly popular due in part to the the low interest rate environment and a volatile stock market. Investment News’ Darla Mercado talks about why mutual funds are selling more deferred income annuities in “Mutual insurers ramp up development of deferred-income annuities.” This so-called longevity insurance basically means that you purchase an income stream now that you won’t receive until the future. The time frame starts at ten years and can be much higher. The risk with deferred income annuities is that you have the possibility of dying before you start receiving your income stream. That is part of the reason for the alternate name of longevity insurance, so that people realize they are insuring themselves in case they live a very long life.
Northwestern Mutual Life Insurance Co. has just introduced the Select Portfolio Deferred Income Annuity. RetireEase Choice from Massachusetts Mutual Life Insurance Co. was introduced just last month. New York Life Insurance Co.’s product is a little different because it is a variable annuity with lifetime income that comes from a deferred income annuity. MetLife Inc. and Symetra Life Insurance Co. also offer deferred income annuities. Northwestern Mutual’s annuity takes advantage of the fact that they can offer dividends to their clients, which increases their guaranteed income floor. This is one of the main differences allowing mutual insurance companies to take better advantage of deferred income annuities.
While low interest rates are not helping insurance companies make good profits now, they are hopeful that rates will increase and their profits will as well. Mutual insurers are able to invest in the long term bond markets in order to fund their deferred income annuities. They don’t have the pressure of their competitors who have to prove increasing profitability to shareholders on a quarterly basis. Beacon Research just recently started tracking deferred income annuities. But between the first and second quarters of this year, sales went from $155.4 million to $202.7 million. Low interest rates have made annuity product competitors less appealing, so deferred income annuities offer insurance and longevity protection by taking on a little more risk.
Written by Rachel Summit
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Date posted: July 28, 2011
According to Symetra’s press release, “Symetra Financial Reports Second Quarter 2011 Results,” the company had a significant year over year quarterly increase. Their second quarter net income of $59.4 million was a large increase over the second quarter of 2010′s $35.8 million. Their adjusted operating income of $49.8 million was also an increase over last year’s $41.5 million adjusted operating income. Group loss ratio increased in both the first and second quarter of this year. The account values for Symetra’s deferred annuities increased to $10.9 billion. Income annuities showed improvement based on mortality gains, while life earnings went down due to higher administrative costs and a lower return on assets. Symetra’s investment portfolio had net gains of $14.1 million after a loss in the second quarter of last year.
Symetra has been working on a lot of new products this year as well. The Symetra Edge Pro fixed equity indexed annuity is their updated SPL product. Symetra’s ‘Grow and Diversify’ strategy has been increasing the company’s assets based on expansion of their distribution channels and bringing new registered investments to the forefront. Variable annuities with lower costs because they don’t have living benefit guarantees are in increasing demand right now. Variable and fixed deferred annuities had an increase in adjusted operating income and set records in both total account value and fixed account value. Some of the company’s variable and fixed annuities numbers were down, based on lower annuity rates and interest rates in general right now. Single premium immediate annuities had a strong adjusted operating income lead by $4.9 million in mortality gains. Overall, Symetra is pleased with their second quarter results and is staying strong through difficult financial times.
Date posted: July 24, 2011
Some new registered annuities are being developed by Symetra Life Insurance, according to IBR’s “Symetra to develop registered annuities products.” Kevin Knull is their new senior vice president of registered investments. He was hired to help Symetra expand their portfolio of annuities. Their first focus is the development of variable annuity products with lower costs. There is a demand for variable annuities that cost less because they don’t have the living benefit rider guarantees attached. Advisors and investors alike are looking to solve problems with their variable annuity products and Symetra believes that Knull is right person to do this problem solving.
Knull previously worked as the CEO of consulting firm The Knull Group. They helped insurance companies and investment groups improve their product and sales practices. Before that, Knull worked at The Hartford Financial Services Group for nearly a decade. His boss will be the executive vice president of the retirement division, Dan Guilbert. He says that Knull has a wealth of knowledge working with the variable annuity, as well as with advisors and representatives. After working to improve their variable annuity offerings, Knull will likely look into the fixed annuities offered by Symetra and see what changes can be made to better suit their advisors and investors.
Date posted: May 6, 2011
Symetra Financial and Legacy Marketing Group are both offering commodities with their indexed annuity products now, according to Insurance News Net’s Linda Koco. In “Commodities Debut in Indexed Annuities,” we learn about the Symetra Edge Pro, which offers the S&P GSCI commodity index as well as strategies tied to the S&P 500. You can choose between point-to-point or monthly average crediting strategies. Twenty-four commodities in many different sectors make up the S&P GSCI, making it a good measure of the world’s economy. Legacy’s Gold Commodity strategy will be offered in three indexed annuity products this summer. It credits interest based on the changing price of gold and has already been used in some of Legacy’s indexed annuities issued by Investors Insurance Corp.
One of the driving forces behind these commodities options is producer demand. Depending on the pricing trends, investors may get a higher interest crediting method with their indexed annuity being tied to a commodities index. These indices may also perform well when others are not, so they could work well for certain investors and annuities. Commodities don’t always perform differently than equities, but in the past forty years, commodities have gone up while equities have gone down more than half the time. Other advantages for linking to commodities include flexibility, diversification, and the protection from market downswings like with other indexed annuity products. There are currently twelve indices available for commodities linking and you may be able to find fixed accounts as well.
Date posted: May 3, 2010
From a company press release, Symetra Financial showed strong first quarter 2010 results. Their net income increased to $46.3 million from $5.1 million in the first quarter of last year. With an increase of 30% in their adjusted operating income over last year, Symetra went from $32.2 million to $41.9 million. They are pleased with the sales in all of their distribution channels because total sales increased after a slight decrease at the end of 2009.
Their Retirement Services segment includes deferred variable and fixed annuities, along with retirement plans. Led by excellent sales of fixed deferred annuities, account values were at a record level high in the first quarter 2010. Retirement Services produced $17.3 million last quarter in pretax adjusted operating income, which was up from $9.0 million the same quarter last year.
Income Annuities, including single premium immediate annuities and structured settlements, were actually down from last year. This is because mortality losses were much higher than last year’s abnormal mortality gains. The actual sales of $66.3 million were an increase from last years $40.4 million in income annuity sales. These annuity products have high popularity because many consumers are looking for low-risk lifetime income investments.