Annuity FYI Blog

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.

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.

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.

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.

Symetra Financial’s press release “Five Steps to Retiring On Time” lists annuities as an important tool for retirement success.  A recent survey conducted by Symetra and two partners showed that nearly half of pre-retirees (45 and older) have not determined how much income they will need to take them through the rest of their lives.  Well over half of the pre-retirees didn’t think that they would be able to retire at their ideal retirement age.  With this information, Symetra has issued five steps that they believe can lead you to a comfortable retirement.

First you should “create a plan.”  Determine how much money you will need in retirement, including medical care, inflation, traveling, and other expenses.  Many estimates show that people need about 80% of their pre-retirement income in retirement.  The next step is to “manage and reduce your expenses now, before retirement.”  Cut costs where you can and pay off your credit card debt before you lose your working income.  The third step is to “diversify your investment portfolio.”  While it still will not guarantee a profit or promise no losses, spreading your investments over different products and investment styles is the best way to protect against the market.

Next you should “continually evaluate your investments.”  Changes in your life, health, job, and other areas make it important to reevaluate your goals and risk levels.  The final step is to “consider creating a guaranteed income stream during retirement.”  Annuities are one of the best products to ensure that you do not outlive your savings.  Always check fixed annuity rates and variable rates because you can find great products out there to help you in retirement.  By using a portion of your savings to purchase an annuity, you guarantee a monthly income stream coming in for life.