Brighthouse 4Q Annuity Sales Rise 26 Percent

Fourth-quarter annuity sales rose 26 percent to $1.34 billion over the year-ago period on the strength of the company’s Shield-branded family of buffered variable annuities (VA), Brighthouse Financial reported.

Quarterly sales of Shield buffered VAs rose 74 percent to $794 million compared to the year-ago period, the company said.

Shield buffered VA sales for 2017 were $2.5 billion compared to year-end 2016 sales of $1.7 billion, Brighthouse added.

Overall, the company was pleased with the quarterly sales performance of its annuity products, said Brighthouse Financial president and CEO Eric Steigerwalt in a Tuesday conference call with analysts.

The buffered VA market is a fast-selling segment of the broader variable annuity market, which is expected to shrink this year.

Fourth-quarter net income was $668 million compared to a net loss of $1.8 billion last year, Brighthouse reported.

The results are the first full financial quarter for the Charlotte, N.C.-based company, which was spun off from MetLife in August.

Fixed Annuity Sales Fall, Indexed Sales Rise

Brighthouse, which inherited much of MetLife’s retail annuity business, is a leader in the retail VA market.

Buffered VAs are structured to protect, or buffer, buyers against most market losses – but not the huge losses – in exchange for a higher cap on credited interest.

Insurers and distributors – banks and broker-dealers – like buffered VAs because they are typically shorter-duration products and well matched for an era of low interest rates.

Buffered VAs don’t require as much capital as traditional VAs that come with income guarantees, and adding buffered VAs allow insurers to diversify their VA book.

U.S. sales of buffered VAs are forecast to reach $9 billion in 2017 and other insurers are preparing to enter the buffered VA market in 2018.

Fourth-quarter fixed annuity sales fell to $41 million from $87 million in the fourth quarter of 2016, Brighthouse said.

Sales of fixed indexed annuities, sold through a labeling arrangement with Mass Mutual, rose to $203 million in the fourth quarter.

Life insurance premiums in the fourth quarter rose 51 percent to $172 million over the year-ago period, the company said.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].

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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 [email protected].