Keeping it simple — With Bill Egan

In a world that grows ever more complex, one industry executive is leading a movement toward making life insurance and annuities easy for consumers to understand and for advisors to sell.

Bill Egan is chairman and CEO of Oceanview Life and Annuities, whose mission is to empower individuals on their journey toward a financially secure retirement by providing straightforward and reliable annuity solutions.

Egan had an extensive background in finance before helping Oceanview make its debut in 2019. Since the company’s creation, it has grown to more than $11 billion in invested assets.

In this interview with InsuranceNewsNet Publisher Paul Feldman, Egan gives his views on the future of the annuity market, the role artificial intelligence will play in the industry and the need to keep products from becoming too complex.

PAUL FELDMAN: Tell me a little bit about your background and how you got into this industry.

BILL EGAN: I was originally a lawyer, and I was a partner in a law firm that did a lot of regulatory work, particularly in insurance and utilities. I started working in corporate mergers and acquisitions and finance-related transactions in the insurance industry. I left there and went into investment banking, focused also on insurance. I did that first at Credit Suisse, First Boston for five years and then the next 15 years at Merrill Lynch. After Merrill was acquired by Bank of America, I ran the global financial institutions group, which covered all financial industries worldwide at Merrill and Bank of America.

I was there through 2014, and left to join one of my clients, which was Oaktree Capital Management. I represented a hedge fund called Harbinger, which bought F&G Life at one point. Oaktree was acquired by Brookfield. I was contacted by Bayview Asset Management, which, I believe, is the largest mortgage loan servicer in the United States that’s not a bank. They have a large operation, called Lakeview, that does that. And Bayview also is a large aggregator of residential mortgage loans in the U.S. through a network of large financial institution connections where they buy and sell mortgage loans. They also have a hedge fund construct, which has, I believe, around $20 billion under management in their hedge funds. 

They’re probably one of the top experts in the residential mortgage space in the U.S., but they were interested in getting into the life insurance and annuity space.
They eventually started Oceanview, and I was right there when Bayview started Oceanview. I put together the business plan for Oceanview. We have a Bermuda holding company. We have a U.S. life insurance company and annuity company that would sell primary. We also have a reinsurer in the Cayman Islands and we have two Bermuda reinsurers. 

The idea is that we would sell retail annuities into the retail marketplace, primarily through independent marketing organization channels, and then we would do third-party reinsurance deals as well as some reinsurance of our own business on affiliate into our offshore entities.

Bayview raised $1 billion in a single fund construct just devoted to Oceanview, and that was managed with Bayview Asset Management as the [general partner]. They’re all big institutional pension funds, sovereign wealth funds. There’s no retail construct there.

We launched our operations in December 2019, having raised the billion dollars in May 2018.

FELDMAN: Your company has experienced a meteoric rise. Tell me about the early days and how you overcame any challenges you faced.

EGAN: We were fortunate that we had a billion dollars of capital and no liabilities when we began. Because AM Best believed in what we were doing and the expertise Bayview brought to the table, we started with an A- rating. That was a huge advantage when opening our doors.

We had to set up the structure for the third-party administrator space. We had to set up relationships with the distributors, primarily IMOs, but we also set up relationships with banks and broker-dealers. We had to set up our regulated entities in Bermuda. 

But what I think is most important is that we wanted our products to be simple and transparent to the consumer. Products can get complicated, and we wanted to make sure we knew what we were selling and the customer knew what they were buying. 

FELDMAN: Tell me about the products you sell and what makes them unique.

EGAN: We sell multiyear guaranteed annuities and we sell fixed indexed annuities. The MYGAs are not unique to us.
We sell anything up from two years through 10 years, although we don’t sell eight- and nine-year annuities right now. Our MYGAs are simple and they’re similar to what our competitors sell, but again, it’s important to us that we understand our product and understand the cashflows that go with our product. And we want the consumer and the distributor to understand our products.

As for FIAs, we only do accumulation, we don’t do income benefit riders, we don’t do bonus products. We do a very simple accumulation product. 

We don’t do traditional life insurance. We don’t do indexes that are complicated, hard to understand or hard to hedge. We do the S&P, the Nasdaq and the Russell indexes, we do basic product features.

FELDMAN: Simplicity in product design is not commonplace in this industry. How are you addressing simplicity?

EGAN: Our view is: 1) We want the customer to understand what they are buying; 2) We need to protect our policyholders by making sure we know exactly how much it costs to hedge a product and having that factor into our pricing. 

We think it’s easy for the distributor to explain to the policyholder what the product is and how it works. 

FELDMAN: Annuity sales continue to hit record highs. Where do you see the annuity marketing going in 2026?

EGAN: We’re in this great demographic trend, which is the aging baby boomers. The desire for deferred tax appreciation, low equity market risk and low volatility makes fixed annuities attractive. That has proven to be the case with the MYGA market to some degree. 

Some of the demand for annuities depends on rates. When rates started going up at the end of 2022, that gave a lot of wind to the MYGA business. People wanted the attractive rate, so I think the market will stay pretty strong through this year.

If rates go up, that’s a big help for the product. If rates go down, it gets a little trickier because then the customer is less interested in buying the product because they think rates are too low so they don’t want to commit to a longer-
dated product.

The problem with that mentality is that the consumer doesn’t understand the value of tax deferral, because when you have an interest rate of 4.5% from a bank or 4.5% from an annuity, the 4.5% from annuities is better for most clients.

FELDMAN: How does the industry do a better job of communicating about annuities with consumers?

EGAN: We have well-informed agents and we think they’re good at informing consumers. 

People always value the tax deferral, but they think more of the rate or they think more of their liquidity. And I’m not sure how you convince the customer to value it more. 

FELDMAN: There are a lot of bad things being said about annuities but there are also a lot of good things as well. How do advisors compete with the pressure they face from online platforms?

EGAN: I think it’s more complicated to discuss annuities with the customer than it is to sell them a bank certificate of deposit. I think the FIA is an even more complicated product for the customer to understand. It’s a difficult product to buy online unless it’s a simple FIA. But for a long-dated, 10-year FIA with numerous options to select — such as what cap rate you want or participation you want for a period of time — that’s a more complicated decision and one where the customer is looking for someone to give them advice. 

FELDMAN: What are your thoughts on all the indexes that are out there now?

EGAN: There are an enormous number of indexes. We’ve tried to keep it pretty simple. When we started, we had an index that Credit Suisse had that was a retirement index, but honestly it sold hardly anything. We recently did a proprietary index called Topsider that is supposed to allow you to let your money roll for incremental participation. That has not been a big seller so far. 

So we looked at the data and saw that about half the industry money goes into the S&P 500. 

FELDMAN: What is Oceanview doing for advisor support and training?

EGAN: We have a team who provide support to the agents. And then we use wholesalers; we have a couple of bank wholesalers. We recently went into a system where we have separate wholesalers. Those wholesalers provide much of the education and support for the agents, and then our back office provides support for the wholesalers.

FELDMAN: How does artificial intelligence fit into Oceanview’s future?

EGAN: I’ll give you an example. We were looking at rates, commissions, ages, location — what it is that makes someone want to renew or not. We’ve been studying it for two years now and we had a ton of data. We did our own sort of correlation analysis. And I said to the team a few weeks ago, “Let’s take this and input into our AI model with the question and the data we have to get the answer to what makes someone renew or not renew?”

One of the hardest things to do is find new customers. There should be a model that tells you the type of customer who will come to you.

Another issue is orphan agents. Many people get into the business and they find they don’t like it, or it’s tough, and the next thing you know, the customer has an orphan agent. How do you predict who will become an orphan agent and what happens to their customer? I think AI would be helpful in answering that.

FELDMAN: Is there anything else you wanted to say?

EGAN: My view is that I think our products are good and provide a lot of protection for the customer. And I think regulators are conscientious about how we make the business better. 

But what else can we do? I don’t have the complete answer. We study renewals, we’re studying orphan agents, we’re studying all these things. But I think the key question is: What do we do about all the complexity? Because making products too complex can be deadly for this business.