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Prudential & AIG Pick Up MetLife's Variable Annuity Business

As MetLife scales back on their variable annuities, other companies are picking up the market share.  According to Bloomberg Business News’ “Prudential Joins AIG Taking Annuities Share From MetLife,” Zachary Tracer says that Prudential and AIG are the main companies who have capitalized on MetLife’s variable annuity changes.  Prudential has sold the most variable annuities this year, according to LIMRA.  Their second quarter sales were $5.35 billion, which was an 18% increase.  Their market share went from 11% at this time last year up to 14% this year.  Prudential’s vice chairman attributes their sales gain to changes that competitors made, making Prudential’s products even more attractive to investors.

AIG, or American International Group Inc., was one of the companies who received a federal bailout.  They increased their market share to 6.1%, according to LIMRA’s recent data.  Their sales of $2.34 billion were a 22% increase for the company.  Overall variable annuities in the second quarter saw a decline of 4.9% from last year to $38.6 billion.  While MetLife reduced their exposure in the variable annuities market, some companies have left it altogether.  Hartford Financial, Genworth Financial, and Sun Life Financial have chosen to exit the variable annuity market.

Despite the fact that MetLife has scaled back on their sales of variable annuities, they were still the third largest seller and held 12% of the market share.  This was down from the 17% market share they held last year as their sales went down 34% to $4.61 billion.  The second highest variable annuity sales after Prudential were from Jackson National, with $5.26 billion.  In order to maintain a solid business, both Prudential and MetLife have had to lower some of their variable annuity guarantees and changed some of the terms of their policies.  AIG’s newest variable annuity is helping them lower risk with an investment option that lessens the ties to volatile market swings.  New leaders will continue to emerge as companies enter and exit the variable annuity market.

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