AIG Life & Retirement, a leading provider of annuities, today announced the launch of Advanced Outcomes AnnuitySM. This new annuity is issued by American General Life Insurance Company, a subsidiary of American International Group, Inc.
As a variable annuity featuring structured outcome investments, the Advanced Outcomes Annuity targets higher growth than many traditional structured annuities while also seeking a level of downside protection, through the unique investment strategies that have been developed with Milliman Financial Risk Management, AIG said in a news release.
One example of the new product’s growth potential is that nearly two-thirds of the investment strategies are not subject to a cap, a product term that describes a maximum performance applied to an annuity’s return over a selected time period.
“We are pleased to launch the Advanced Outcomes Annuity, a new category of structured investing where financial professionals and their clients can own the moment and drive investment outcomes,” said Bryan Pinsky, president, Individual Retirement, AIG Life & Retirement. “The structured outcome investments emphasize stronger growth potential and targeted downside protection, while the overall product design creates a valuable level of investment flexibility.”
The structured outcome investments in the Advanced Outcomes Annuity are designed to create opportunities for growth with three different options for the variable annuity to capture growth potential: par up (pre-defined percentage of market gains), spread (gains related to a market index less an initial, pre-defined percentage) and stacker cap (the market gains of an index such as NASDAQ-100® added to the S&P 500®, each up to a pre-defined level).
The annuity also provides three downside protection options that seek to reduce the impact of market downturns: par down (pre-defined percentage of a market decline), floor (maximum market loss) and buffer (pre-defined level of protection against market losses).
The Advanced Outcomes Annuity also includes Capture-Reset-Reinvest, the flexibility to reposition both the growth potential and downside protection options—at any time and for any reason. As a result, financial professionals and their clients can capture investment gains whenever they choose and then reset the downside protection while also reinvesting in new strategies, all within a tax-deferred vehicle. The variable annuity has a six-year surrender period.
“The ability to Capture-Reset-Reinvest is at the heart of the incredible flexibility we have built into the Advanced Outcomes Annuity and its structured investment strategies,” said Pinsky. “We anticipate financial professionals to have clients who may see solid investment returns over a period of time and then want to lock in those gains while also repositioning opportunistically. Investment opportunities can change, so the Advanced Outcomes Annuity gives clients a way to adjust their structured investments with their expectations for the future.”
The Advanced Outcomes Annuity is the first-ever annuity to offer structured strategies with a fund investment term of six months, in addition to more traditional one-year and six-year strategies. These six-month fund investment terms deliver even more flexibility and control by providing financial professionals and their clients the opportunity to adjust the investment strategy more frequently.
The structured outcome strategies in the Advanced Outcomes Annuity are independently managed by Milliman FRM. A leading provider of outcome-based investment strategies, Milliman FRM offers a state-of-the-art approach to investing that seeks to reshape the risk and return profile of a market over a given time period.
“We are honored to join with AIG Life & Retirement as they continue their tradition of annuity excellence and innovation,” said Adam Schenck, managing director, Head of Fund Services, Milliman FRM. “Milliman is at the leading edge of structured outcome investments, and we are excited to be writing the next chapter with AIG Life & Retirement.”