Pacific Life Adds Options To Variable Annuity Offerings

By Cyril Tuohy

Pacific Life has added 13 new investment funds in 10 investment categories to diversify investment options for variable annuity investors and advisors who serve them.

Advisors have new choices to select in intermediate-term, high-yield and world bonds; large-cap value, large-cap growth, world and foreign large-cap growth stock fund; multialternative funds; and world allocation and tactical allocation fund options.

American Funds, Oppenheimer, First Trust, Neuberger Berman and ClearBridge are listed among the managers for the new funds, the company said.

"The addition of these new investment options aligns with those goals by opening up new opportunities to satisfy the individual needs and preferences of multiple investors, and all the new options are professionally managed by firms their advisors know and trust," Christine Tucker, vice president of marketing for Pacific Life's Retirement Solutions Division, said in a news release.

Pacific Life’s investment lineup includes 100 investment options across 40 distinct investment styles, according to the company’s website. The investments are managed by more than 30 asset managers.

Variable annuities’ struggles are well documented.

Third quarter variable annuity sales fell 7 percent to $32.9 billion over the year-ago period, according to LIMRA Secure Retirement Institute (SRI), as sales suffered in the wake of the late-summer volatility of the stock market.

For the first nine months of 2015, variable annuity sales fell 4 percent to $101.3 billion compared with the year-ago period, LIMRA also reported.

Equity-linked investments lost tens of billions in dollars in value in August over fears of a slowing Chinese economy. At the same time, a broader structural shift in demand away from variable annuities to other forms of annuities also is taking place, Todd Giesing, assistant research for LIMRA SRI, said in a news release.

“Today, variable annuity sales make up 54 percent of the overall annuity business, down from 67 percent just in 2012,” Giesing said. “This decline in variable annuity market share has certainly contributed to the growth in the indexed annuity market.”

Variable annuity net assets also fell 3.3 percent in the third quarter from $1.9 trillion at the end of the third quarter in 2014, Morningstar also reported.

“Variable annuity sales were down, as expected, because the third quarter has historically shown reduced volume,” John McCarthy, senior product manager, annuity products, for Morningstar, said in a statement.

“Some segments of the market, like investment-oriented variable annuity products, continued to grow,” he added. “Overall industry sales are being affected by modest investment returns and tepid interest rates, both external factors that created headwinds in the third quarter.”

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

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].