Prudential Financial Inc., MetLife Inc., Jackson National Life, and TIAA-CREF were the top four sellers of variable annuities through the first three quarters of this year, according to The Wall Street Journal. “Variable Annuities’ Giants Grow,” by Leslie Scism and Erik Holm, points out that the four top sellers accounted for nearly half of all variable annuity sales. With 48% of the market share occupied by these four insurers according to LIMRA International, there was a significant increase from 2008 when the top four sellers accounted for 36% of the market share.
As you compare annuities like these that guarantee retirement income, insurance companies have been updating and changing their products to adapt to a new financial marketplace. Overall sales of variable annuities were up 8% through the first three quarters of this year. That increase over last year made for sales of $102.8 billion. Insurers have made changes to their variable annuities to make sure that they are profitable while remaining relevant to financial advisors and others who sell them to investors.
While variable annuities cost more for the benefits they give out than before the financial crisis of 2008, they are still being sold in near record numbers because of the perceived value from investors. They are similar to mutual funds but offer tax advantages. Many investors like to take advantage of the minimum guaranteed benefits given even when funds don’t perform as expected. Whether purchased as immediate annuities or deferred until a later date to take advantage of tax savings, investors remain very interested in variable annuities to fund their retirement.