Prudential Financial Inc. and Jackson National Life Insurance Company have seen a large increase in their variable annuity sales through banks. Prudential has seen the majority of their overall growth come from new channels of distribution, rather than their past sales channels. Their second quarter variable annuity sales were $5.31 billion, which was an increase from $3.37 billion in the first quarter of this year. While they saw a decline in their fixed annuity sales and after-tax adjusted operating income, Prudential is very happy with the prospect of growing their variable annuity business while they work to increase the other sales.
A combination of Prudential offering some of the best variable annuity guarantees and compensating advisers well has most likely led to this recent increase. As the markets became more volatile and interest rates fell, many companies significantly reduced their variable annuity business, allowing Prudential’s Highest Daily variable annuity to top the sellers list last year. Prudential has even reduced some of their benefits because of the low interest rates, changing their Highest Daily Lifetime 7 to the Highest Daily Lifetime 6 last summer. Their pricing model is evaluated frequently and can be changed a few times a year if they find that necessary.
Prudential is open to purchasing other companies in order to expand their business, but stated that they have no definite plans to do so. Their top goals would likely be to expand business in Japan and the U.S. retirement industry. Selling the best annuities and other products in their marketplace always remains important, so any acquisition would have to follow their model. AIG’s Star Life Insurance Co. Ltd., AIG Edison Life Co., and ING all seem to be possibilities for purchase by Prudential.