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Indexed Annuity Sales Winners and Losers

2015 was a record breaking sales year for fixed indexed annuity products, especially in the fourth quarter. Nationwide Financial and AIG had the largest gains last year in indexed annuity sales. Investment News’ Greg Iacurci summarized last years winners and losers in the article “Nationwide, AIG see huge gains in fixed indexed annuity sales; Allianz and Security Benefit flounder.” 2015’s record sales hit $54.5 billion, partly because of continued low interest rates, market volatility, and increased attention from distribution channels that used to shy away from indexed annuities. Fourth quarter sales hit $16.1 billion, which is the highest quarterly total ever.

The top 10 indexed annuity sellers in 2015 were Allianz Life, American Equity, Great American Insurance Group, AIG, Athene USA, Nationwide, Midland National Life, Symetra Financial, Fidelity & Guaranty Life, and then Security Benefit Life. These sales results are from Wink Inc., a market research firm.

Nationwide’s indexed annuity sales increased an astonishing 460% from 2014 to 2015. Their sales of $2.49 billion took them from the 23rd spot in 2014 up into the top 10 last year in the 6th spot. There were two major factors leading to their huge sales increase. The company really increased their product development and also entered into a major partnership with Annexus. Their partnership with this field marketing organization started in 2014, but they didn’t start seeing the increasing sales from this New Heights indexed annuity until last year. Their Clear Horizons indexed annuity is selling well also. The New Heights partnership was first offered in one option, but was increased to four different versions in June of last year. Each version caters to a different distribution channel. In the past, Nationwide had a more generic fixed indexed annuity option and didn’t put much focus into the products. They now offer this New Heights annuity with income and death benefit rider options, an index crediting option that is uncapped and other flexible options.

AIG also had a big year with their fixed indexed annuity sales. Their sales of $3.3 billion were an increase of 162% from 2014 to 2015.The company has developed multiple new fixed indexed annuity products over the past few years, but one thing has set them apart from other insurers. AIG develops products for multiple distribution channels, something that most other companies don’t focus on. This has really helped them increase their market share over the past couple of years.

Security Benefit and Allianz Life saw significant decreases in their indexed annuity sales in 2015. Security Benefit went from the 2nd highest sales in 2014 down to the 10th spot in 2015 after sales of $1.8 billion. They stopped selling one of their fixed indexed annuity products that had a lifetime income rider during part of last year. The product was back on the market before the end of last year though, and sales have already started increasing. Security Benefit also reduced the payouts on some of their fixed indexed annuities, a move that drove some distributors right into the arms of American Equity. They ended up in the 2nd highest sales spot in 2015 with sales of $7 billion, a 67.5% increase from 2014. Allianz Life still held the top spot in 2015, but their sales went down 31% from 2014. Most experts believe that this decrease in sales was planned to manage the company’s risk. Their sales went from $12.7 to $8.7 billion. Allianz made small changes to their rider fees and uncapped spreads, a move that was likely meant to keep their risks in line while maintaining profitability.

The major indexed annuity sales winners last year were Nationwide, AIG and American Equity, while Security Benefit and Allianz Life saw the biggest sales declines. After the finalized DOL fiduciary rule hit the indexed annuity industry harder than they expected, it remains to be seen what will happen in 2016.

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