The fixed indexed annuity (FIA) market has a new player according to a recent article from InsuranceNewsNet. Ohio National Financial Services has thrown their hat in the ring for the first time in an attempt to take advantage of growing sales trends in the product arena. Several versions of the company’s ONdex FIA are now available.
The ONdex Annuity is offering four crediting strategies, while ONdex Freedom is offering three, eliminating the option based on a custom index. A fee-based version of ONdex is anticipated in the future, said Ian Laverty, vice president of annuity product management for Ohio National.
“The customers that we service have different risk tolerances, and we are a company for all seasons,” Laverty added.
This is why a third version is offering three crediting strategies that are different from the ones offered through ONdex Freedom, in an effort to conform to requirements of the company’s distribution partners.
Among fixed annuities, FIAs are one of the fastest growing categories with $61 billion sold last year. That’s an annual increase of 12% compared with 2015. Many of Ohio National’s competitors are already selling FIAs, including Nationwide, Symetra and Great American. By jumping in the game, Ohio National has the opportunity to diversify its internal risk exposures with the ultimate goal of growth.
The company, which has a history of selling variable annuities, will distribute ONdex through wirehouses, independent broker/dealers and banks. Laverty claims that they hope to expand into other distribution channels, but for now will concentrate on its long-established institutional relationships.
“When we get to capacity there in these channels we may look to the independent marketing organizations (IMOs),” he said, which are currently responsible for about 60% of FIA sales.
FIAs are attractive to advisors and investors alike because they offer an option for “safe money,” or that which is traditionally locked into certificates of deposit or other bank products. With interest rates remaining low, these traditional products aren’t as attractive. FIAs, on the other hand, offer principal protection with an opportunity to earn more interest.
Written by Rachel Summit