Three ways the Corebridge/Equitable merger could shake up the annuity market

The news of the Corebridge/Equitable merger provided shocks through the life and annuity markets. The merger creates a behemoth in the annuity space (combined 10%-11% of the total annuity market, according to LIMRA and Wink Inc.), potentially leapfrogging Athene and supplemented with broad life offerings.

2025 Corebridge and Equitable annuity sales, according to LIMRA

Although there are several long-term impacts from this merger, three key distribution hypotheses arise:

• The combined manufacturing strength of “New Equitable” will provide sufficient bargaining power with independent channels.
• Fixed costs over significantly greater volume will ensure greater long-term profitability that will lead to even more competitively priced products.
• More “best-in-class” products under one label will improve sales strength and allow greater focus on channel penetration.

Combined manufacturing strength

As two of the top five annuity carriers in the market, the combined Corebridge/Equitable platform will have unparalleled manufacturing power. Carriers are actively seeking alternatives to independent distributors to lower costs, with limited success. With most life and annuity sales now conducted via third-party distribution, most carriers cannot afford to push back against distributors.

This combined Equitable platform may challenge that assumption.

The combined entity would possess strength across nearly all annuity products. That is rare. Although it’s not impossible to replicate, a distributor would be hard-pressed to find a single carrier with the same one-stop shop appeal across the annuity landscape.

Secondly, the introduction of Corebridge’s strong offerings in fixed indexed annuities, multiyear guaranteed annuities and fixed-rate deferred annuities to Equitable’s existing advisor force would provide their captive agents with a captive product suite to make them even more competitive in the market.

This is not to say independent distributors do not matter – they do, and they have options in the market. But as annuities continue to grow in the market, the strength of this scale is meant to be flexed.

More competitively priced products and long-term profitability

The significant number of assets under management and the suite of products made available through this merger should provide better investment return and steadier earnings through volatile economic cycles.

The expectation is that this addition of assets and sales will also be met with significant effort to streamline operations, technology and other key costs, thus lowering individual “unit costs” associated with the life and annuity business.

Lower unit costs can be passed on as savings directly to the consumer. Combining this with the strength each carrier brings across the annuity space will provide the combined entity with a clear path to capturing additional market share.

Leveraging “best-in-class” for sales channel penetration

Independent distributors love having the ability to partner with multiple carriers to develop a product shell that has the best options for their clients. Typically, a carrier is strong in a single product. But this combined entity would provide best-in-class offerings across the annuity spectrum.

As a result, expect to see advisors selling more of the combined entity – advisors typically have a limited number of appointments and of those, have a small number of “go-to” carriers to find products before digging deeper into the shelf.

But “New Equitable” can do something far more impactful – they can focus their efforts on designing products that are not just fit for the customer but are fit for the sales channel. This means that with the scale they will have, they can leverage their expertise across the annuity spectrum to design products fit for a specific channel (e.g., registered investment advisors). This will allow them not just to win the market battle at the product level (e.g., registered index-linked annuities) but also to win it with independent distributors. As annuity growth is increasingly fueled by RILA sales and distribution channel expansion, the combined entity is in a unique position to drive both growth levers.

What it will take to win

While “New Equitable” will have the size, scale and capability to win in the market, the proverbial rubber will meet the road at the time of execution. Operational efficiency, streamlining technology, cost-cutting, and other forms of rationalization must be done efficiently without compromising customer or distributor quality. The ability (or inability) to successfully integrate will determine whether the sum is greater than the parts or whether there is a potential loss in market share due to failed execution.

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Chris Taylor is an established leader in the insurance industry with more than a decade of experience supporting insurance strategy and performance improvement outcomes. Contact him at [email protected].