Annuity carriers are always making changes to their products. But those changes came fast and furious during the month of March, as the COVID-19 pandemic sent shock waves through the financial industry.
Now, two months later, some carriers are returning the products to the market, said Jamie Branyan, annuity product and operations manager with CANNEX, said in a recent webinar.
Branyan said that from March 13 to March 20, CANNEX saw 12 companies change their fixed indexed annuity rates. And from March 23 to March 30, 13 companies changed their FIA rates.
The week prior to March 13, six companies changed their rates. Compare that with the corresponding weeks in both January and February, when four carriers changed their rates.
“My point is that we really started seeing three times the amount of changes that we would normally see during that period,” Branyan said. “So in the course of two weeks, we saw 25 changes.”
One annuity carrier shut down sales of all their fixed products, while another shut down one or two products as well as all their living benefits, he said.
However, he noted, there are some signs that the annuity market may be taking some baby steps back to life.
“We’ve seen products working their way back to being competitive,” he said. “We’ve seen crediting rates going back up but maybe not where they once were pre-March. And we’ve seen income rider rates going up on certain products. But interestingly, we’ve also seen them decrease on other products.
“Depending on the block of business and the different levers that the insurance company has to be able to pull, will determine where they will put the stake in the ground to be competitive versus which product they are pulling back down during this time.”
“We’ve also seen a carrier shut down a product and three weeks later come to us and say we’re ready to sell it again.”
Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.
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