‘All-weather’ annuity portfolios aim to sharply limit rainy days

TAMPA, Fla. -- Shifting economic conditions — including higher interest rates, market volatility and increased regulatory scrutiny — are forcing companies to rethink how they design and manage annuity products, with a growing focus on so-called “all-weather” portfolios.

A panel of industry executives discussed what the term means and what it looks like Monday during an opening session at the LIMRA Life Insurance and Annuity Conference.

Product leaders from major insurers described an all-weather approach as a diversified mix of offerings designed to perform across a wide range of market environments while balancing customer needs and company profitability.

In other words, "a well-diversified, resilient kind of ecosystem of products," said Ryan Abernathy, head of annuity product development at Prudential Financial. “It's having tailored solutions that really work in any market scenario and and for the carrier."

Panelists noted that insurers are navigating a markedly different landscape than just a few years ago. Rising interest rates, in particular, have introduced new stress scenarios that were not widely anticipated in the past.

The discussion highlighted how insurers are moving away from reliance on single-product strategies — such as traditional variable annuities with rich guarantees — toward broader portfolios that include fixed indexed annuities, registered index-linked annuities and spread-based products.

"Beginning in 2020, we began our journey to this all-weather product portfolio," Abernathy explained, with product launches in the RILA, FIA and multi-year guaranteed annuity categories. "We pivoted from our flagship of traditional VAs with living benefits... We haven't completely moved away from guarantees, but they're more selective."

Benefits for all

Diversification benefits both insurers and clients, panelists agreed. For carriers, it can help stabilize earnings and reduce balance sheet risk. For consumers and financial advisors, it provides more tailored solutions depending on market conditions.

From a distribution standpoint, having multiple product options also allows advisors to pivot as conditions change, rather than relying on a single strategy that may fall out of favor.

“If you’ve got a field force that’s only selling one thing ... it's nice to have something that they can pivot to, whether it be in terms of the product segment itself, or just differentiators and ways to stand out," said Nicholas Weber, vice president of annuity product development at Pacific Life.

However, the approach comes with trade-offs. Companies with broad product suites may struggle to maintain depth in each category, as resources must be spread across development, pricing and ongoing product maintenance.

The panel also pointed to the rapid growth of RILAs as an example of both opportunity and risk. In the fourth quarter of 2025, RILA sales were $22.1 billion, 23% higher than the prior year. For the year, RILA sales increased 20% year over year to $79.5 billion, LIMRA reported, 10 times the sales recorded a decade ago.

While RILAs have gained popularity for offering a balance between risk and protection, panelists warned that increasing product complexity could create challenges for both advisors and consumers.

“Complexity can creep in because you want to deliver for the market the flexibility that consumers crave and ask for," Abernathy said, "but at the same time, you've really got to make this simple."

In addition to consumer understanding, insurers must manage internal risks tied to more complex products, including hedging challenges and liquidity considerations.

Spread-based products, another growing segment, were described as offering more predictable earnings and a “sleep-at-night factor” for both insurers and clients, as Abernathy put it. But only when supported by disciplined asset-liability management.

Policyholder behavior

Panelists also emphasized the importance of data and policyholder behavior assumptions, particularly in a rapidly changing economic environment where historical trends may not hold.

"Everybody, depending on when they enter a market or launch a product, is going to have a very slim cohort of data that they can rely upon to make those possible behavior assumptions," Weber explained. "And if you're going through a rapidly changing rate credit spread environment, those are paramount."

Looking ahead, panelists said regulatory developments and evolving market conditions will continue to shape product design, requiring insurers to remain flexible and forward-looking.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.