Annuity FYI Blog

According to John Sullivan of Advisor One, there will be 82,000 more advisors selling annuities from Lincoln Financial Group because of their partnership with Primerica.  In the article, “Primerica Reps to Distribute Lincoln Financial Indexed Annuities,” it says that there will be two phases to completing the new distributions.  Primerica employs the biggest number of licensed annuity sellers in the United States, so the fact that they will now be selling Lincoln Financial’s fixed indexed annuities is a big boost to the company.  A smaller group of Primerica reps will start selling Lincoln’s New Directions and OptiChoice annuities now.  By early 2012, the second phase will include all of Primerica’s reps selling on a national level.

Lincoln Financial has put a team in place to support their relationship with Primerica, headed by John Chidwick.  He’ll be the national sales manager in charge of all back office support activities for Primerica.  Both companies are looking to offer their clients retirement products that offer a potential for gains along with protection against down markets.  Primerica’s focus on ‘Main Street’ clients will allow Lincoln Financial to expand their position in the middle market.  Primerica’s president is excited to add a quality product for his reps to take to their clients when planning their retirement.

Written by Rachel Summit

With the help of big sales increases for both variable annuities and fixed equity indexed annuities, Lincoln Financial Group earned $56 million more in the first quarter of this year compared with the first quarter of last year.  Henry Steelman’s Annuity News Journal article, “Lincoln Financial Group Up 16 Percent From Last Year,” said that Lincoln had $339 million in net income for a 16% increase in the first quarter.  Their CEO Dennis Glass said their increase was due to strong sales and margins based partly on increasing equity markets and net flows.  Almost all of their divisions showed increases in the first quarter, which led to a gain of $.25 in the company’s earnings per share.  Their earnings per share went from $.83 to $1.08.  Annuities increased 16%, consolidated deposits increased 13%, and life insurance policies increased 12%.

Lincoln has more than $2.6 billion in annuity assets, which increased significantly by their strong sales of fixed equity indexed annuities and variable annuities in the past year.  Annuity sales increases have helped their stock price go up to $30.85, which is the highest it has ever been.  Lincoln’s annuity division had a 33% sales increase in 2010 from its sales in 2009.  A 26% increase in third quarter sales last year was another big reason for their strong 2010.  They were also able to repay the entire loan that they had received from the government after the economic crisis in 2008.  As annuity sales continue to drive Lincoln’s financial success, look for them to stay on an increasing sales and stock price path.

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.

A new partnership between Lincoln Financial Group and Humana Inc. will make it easier for consumers to purchase fixed indexed annuities and long term care insurance.  According to Annuity News Journal’s article “Humana Inc. Forms Partnership with Lincoln Financial,” Henry Steelman writes that more than 2000 agents for Humana will be selling the financial products of Lincoln.  Humana Inc. is a health insurance company out of Kentucky, selling policies to consumers nationwide.  Lincoln Financial, out of Pennsysylvania, offers many different financial services around the United States.  This partnership between the two companies allows consumers nearing retirement to purchase all of their necessities in one convenient place.  They’ll be able to get health insurance as well as financial planning products from the same agent.

Lincoln Financial, traded on the NYSE as Lincoln National Corp., offers numerous annuities and insurance products to their consumers.  The financial products that will be sold through Humana are fixed indexed annuities and MoneyGuard, a form of long term care insurance.  As the cost for long term care increases dramatically, insurance to protect against that expense becomes more important than ever.  Between long term care insurance and annuities to cover basic living expenses in retirement, Humana believes that they are offering their consumers important products to complement their health insurance.  They don’t think there is much more important than protecting yourself with health insurance and the proper finances to carry you through life.  Since many consumers don’t have a financial advisor, having these products available through their health insurance company allows consumers access to financial products they may not have seen before.

According to a press release from State Street Global Advisors, they will now be working closely with Lincoln Financial Group’s variable life and annuity business.  In “State Street Global Advisors Expands Innovation within Lincoln Financial Group’s Variable Life and Annuity Solutions,” we learn that the investment management business will sub-advise Lincoln’s variable investment options.  Lincoln’s new Variable Insurance Product uses many exchange traded funds that are currently part of State Street’s fund management.  Eight different variable annuity ETF’s sub-advised by State Street and currently offered by Lincoln are used along with State Street’s SPDR(R) ETF’s.

Lincoln is excited to offer their investment clients sophisticated options in the insurance industry, including what they view as some of the best annuities.  August 2 was the date that State Street took over as Lincoln’s sub-advisor.  Since ETF’s have a relatively low cost and many trading and other benefits, their demand in the variable life and annuity business has been increasingly high.  State Street focuses on clients when determining solutions and believes that their partnership with the innovative Lincoln Financial will not only help financial advisors, but investors as well.  Both companies are hopeful that this new partnership will grow their businesses and keep their clients moving in the right direction.