Annuity FYI Visitor Blog

Jackson National Life Insurance Company had record sales and net income in 2009, according to Business Wire press release “Jackson(R) Announces Record Sales and Record Profit in 2009.”  With sales and deposits of $15.2 billion, Jackson saw an 8% increase from 2008.  Their net income of $670 million was a complete turnaround from a $1 billion loss in 2008.  Although the financial market was still a challenging one, Jackson recorded their highest sales and net income in the history of the company.  Variable annuities accounted for $10 billion of their 2009 sales, an increase of $3.5 billion from the previous year.  Jackson’s fixed index annuities sold $2.2 billion, which was an increase of more than 100% from 2008.  While traditional deferred fixed annuity sales decreased from 2008, they still accounted for $1.6 billion in sales.

Ratings from all four financial strength rating companies have remained strong over the past seven years.  A.M. Best rates Jackson an A+(superior), Standard & Poor’s and Fitch Ratings both rate them an AA(very strong), and Moody’s Investor Services Inc. gives Jackson an A1(good) rating.  These strong ratings are earned in part by Jackson’s top annuity sales rankings in 2009.  They had 5.9% of the market share in total annuity sales which put them in 4th place.  They were also 4th in new sales of variable annuities, giving them a market share of 8.1%.  A market share of 7.5% in sales of fixed index annuities gave Jackson their third 4th place ranking.  While they dropped in ranking for fixed annuity sales from 2008, it was a planned move to preserve the company’s capital.

With $30 billion of sales in 2009, indexed annuities set a record for the highest sales of all time, according to “2009 Indexed Annuity Sales Set Record” from Insurance News Net.  The previous record from 2007 was beat by close to 10%.  Data representing 99% of the companies selling indexed annuities was collected by Annuity Spec’s Indexed Sales and Market Report.  While 4th quarter indexed annuity sales were down from the third quarter, sales levels were adjusting back to a normal level after their record highs.

Allianz Life remained in the top spot for total 2009 sales, as well as staying in the #1 carrier position in the market.  Their MasterDex X held its position as the top selling indexed annuity for the third quarter in a row.  Indexed annuities are tied to the markets, proving that their annuity rates were popular to investors.  After Allianz Life, Aviva moved up to the second spot in this annuities market.  The third, fourth, and fifth spots were occupied by American Equity, Jackson National, and ING.  In regards to bank and wirehouse 4th quarter distributions, Jackson National Life had the most indexed annuity sales.

Investment News‘ Darla Mercado summarizes the variable and fixed annuity sales of 2009 in her article “Banks’ annuity fee income rose, FA sales fell in ‘09 3Q.”  Through the first three quarters of last year, bank holding companies saw the fee income from their annuity sales increase.  The sale of fixed annuities however, decreased in the third quarter due to their decline in popularity through 2009.  With $2 billion in fee income from variable and fixed annuity sales during the first three quarters of 2009, banks saw a 2.5% increase from the same time frame during the previous year.  Commissions increased 4% during the third quarter, according to a report of the top 922 bank holding companies.  Overall, 71% of the largest banks accounted for almost 95% of the total annuity commissions.

Wells Fargo held the top spot even though their income was actually down from the comparable period in 2008.  In second place was JP Morgan Chase & Co who also saw a decline from 2008, albeit a small one.  Regions Financial Corp. and Bank of America Corp. saw the largest gains in annuity fee income during the three quarter time period.  Western National Life was the largest seller of fixed annuities, despite the product taking an overall decline in the third quarter.  Three companies made their way onto the top 10 list of bank annuity sellers last year.  Jackson National Life Insurance Co., ING USA, and Hartford Life Insurance Company came onto the top ten list in 7th, 8th, and 9th places.  Annuities hold strong as important financial products, despite some declines in the fixed annuity sales.

According to National Underwriter, the news source for life and health agents, Jackson National Life Insurance Company has a new variable annuity product to offer.  It is called ‘Prospective Rewards’ and offers an automatic bonus.  The percentage of the bonus is based on the amount of your initial investment.  An 8% bonus is available for initial premiums adjusted at $100,000 and above.  For adjusted premiums less than $100,000, investors will earn a bonus of 6%.  Jackson says that both the 6% and 8% premiums could also be available for future premium payments.  In a time where many companies are not offering as much in the form of variable annuities, this product from Jackson is a great option for investors seeking a VA.  Jackson National Life Insurance company out of Lansing, MI is part of London’s Prudential P.L.C.

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.