FIA Sales Off At Athene, Rock At Allianz

By Linda Koco
AnnuityNews

Athene USA tried to hold its ground in first quarter 2014 fixed index annuity (FIA) sales. It sold more than $571.8 million, qualifying it to be one of the quarter’s top five sales leaders, according to Wink, Inc. However, the carrier still registered a sales decline from the previous quarter and also from first quarter last year.

This happened in the same quarter, during which top sales leader Allianz Life thundered in at more than $2.8 billion, registering a stunning 142 percent gain over first quarter last year, according to Wink figures.

Despite Allianz’s spectacular gains, Athene’s numbers are the ones that annuity professionals want to know about right now. That’s because Athene swallowed FIA mega-player Aviva USA in October; the sales losses it suffered during its highly publicized merger and acquisition rumpus became a heads-up for future inquiry.

The scorecard

Viewed against its own target, Athene looks to be on its way to achieving its projected $2-$3 billion in total annuity sales for all of 2014. If Athene’s indexed sales merely replicate first quarter results in the following three quarters, the carrier will have sold roughly $2.3 billion in indexed products by year end. Since the company also sells some single premium immediate annuities and multi-year guarantee annuities, the total will be slightly higher.

In terms of industrywide sales, the carrier came in fifth place on Wink’s list of first quarter FIA sales leaders. That’s the same position it held at year-end 2013.

On Wink’s list of top companies in the independent agency channel, Athene took fourth place in first quarter, better than in fourth quarter 2013, when the carrier did not make that list at all.

Overall, Athene sales were down 15 percent from the previous quarter and down 13 percent from first quarter last year, according to Wink. By comparison, the overall industry experienced a 5.8 percent decline in sales compared to fourth quarter — but nearly a 39 percent increase over first quarter last year.

It’s likely that Athene will pick up steam as the year wears on, Sheryl Moore said in an interview. The president and chief executive officer of both Moore Market Intelligence and Wink, Moore has been watching the carrier for signs of potential hiccups as it begins its new life.

“It can take a couple of quarters for a company to get its bearings following an acquisition,” Moore said. But once things are running smoothly, she expects Athene’s sales to start growing, probably in second quarter, she said.

Competition is growing

If the company does increase its sales this year, as Moore predicted, it will happen in the face of increasing competition. Carriers are making enhancements to their products to stimulate sales, she said.

For instance, the average commission paid to the sales agent has gone up — to 5.9 percent in first quarter from 5.6 percent in fourth quarter, according to Wink’s Sales & Market report for first quarter. The report also shows that sales involving products paying 7 percent to 8.99 percent in commission have accounted for an increasing share of sales over the last four quarters, reaching about 55 percent share in first quarter.

“It’s a sign that carriers are slowly getting their products back to the way they were before the market collapse in 2008,” when commissions were in the 8 percent range, Moore said.