Workers expect their defined contribution plans to play a greater role in their retirement income than annuities.
By Cyril Tuohy
New York Life has announced that Matthew Grove, former senior managing director and head of retail annuities for New York Life, has been promoted to chief administrative officer (CAO) in the company’s Insurance and Agency Group, and that David Cruz has been named to Grove’s former post.
Grove will report to Chris Blunt, co-president of the company’s Insurance and Agency Group, and Cruz will report to company Vice Chairman John Kim, New York Life also said.
Cruz, who joined the company in 1994 and previously served as managing director of the company’s Investments Strategy group, was elected senior managing director in charge of the Retail Annuities business, the company said.
Over the past two years, Grove and his team had generated “robust growth,” while also derisking and repositioning the company’s portfolio of annuity products, Kim said in a news release.
Grove, who joined the company in 2009, helped develop and sell New York Life’s Guaranteed Future Income Annuity (GFIA), which generated more than $1 billion in premium in its first 18 months on the market.
“As CAO, Matt’s skills and expertise will further strengthen our life insurance business growth,” Kim said.
The recent promotions are important because income annuities are a huge business for New York Life, which last year paid out more than $1 billion to 129,000 income annuity policyholders, according to the company.
The income annuity market is estimated at about $10 billion and New York Life holds a 33 percent market share in the immediate income annuities space, and a 40 percent market share in the deferred income annuities space, according to industry researcher LIMRA.
Since the recession, many large annuity writers have cut back on some types of annuities and expanded others.
Older variable annuities (VA) issued before the recession came with generous guarantees. After the financial crisis, insurers found it difficult to meet their contractual promises as interest rates stayed low for longer than many companies had anticipated.
To reduce their VA exposures, many companies sold their portfolios or bought the contracts back from policyholders.
Conversely, sales of indexed annuities have soared over the past year as investors take advantage of a strong stock market.
Grove, former chief marketing officer of Jefferson National, was responsible for developing and marketing annuities distributed through the registered investment advisor (RIA) channel, New York Life said.
Cruz, a chartered financial analyst with experience in New York Life’s Guaranteed Products business, played a key role developing New York Life’s presence in the “stable value wrap” marketplace for the company’s Retirement Plan Services division.
Cruz will bring “broad balance sheet experience, keen analytical skills and strong leadership qualities” to his new the position, Kim said.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at Cyril.Tuohy@innfeedback.com.
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