Innovation with Intention: A New Era of Indexed Universal Life Insurance

As financial products grow more complex and customer expectations rapidly evolve, innovation must be more than a slogan—it’s a necessity. For Allianz Life Insurance Company of North America (Allianz), innovation means building sustainable value, designing for real-world needs, and staying focused on the long-term benefit of policyholders.

“Allianz is often first to market with new ideas,” says Jakob Erickson, product actuary at Allianz. “But what really sets us apart is our commitment to innovation that’s backed by strong pricing discipline and thoughtful execution. We don’t just launch something because we can. We do it when we believe it will provide value over the long term.”

This deliberate approach has helped Allianz earn and maintain its position as a leading provider of indexed universal life (IUL) insurance in the U.S. for the past five years.¹ It’s a leadership role built on innovation, integrity, and a time-tested ability to deliver value.

The Power of a Proprietary Platform

What truly differentiates Allianz in the IUL space is its use of a dynamic hedging platform through an in-house affiliate. While most carriers rely on third-party investment banks to manage their risk exposure, Allianz took a bold step in 2006 to build a dedicated hedging team in Allianz Investment Management U.S. LLC (AIM US), a wholly owned subsidiary of Allianz. The move has been instrumental in Allianz’s ability to innovate quickly and cost-effectively.

“Our use of the AIM US dynamic in-house hedging platform allows us to execute what I call ‘instant innovation,” Erickson explains. “There’s no friction from working with external banks, no minimums, and no extra fees. That means we can experiment, iterate, and bring new ideas to market with speed.”

That agility has allowed Allianz to develop industry-first features like Index Lock, which enables customers the opportunity to lock in an index value one time per policy year. Offered at no additional cost, this feature has delivered real results: policyholders have locked in more than $100 million in gains, with an average locked interest credit of 9.8%.¹

Track Record of Industry Firsts

Allianz has a long history of being first to market with game-changing features. It introduced volatility-controlled indexes to the IUL space as early as 2014—years before the broader industry began to follow suit. The company also pioneered crediting methods like monthly sum in 2005 and has continued evolving with newer methods like the Blended Index Strategy in 2008 and the Trigger Method in 2013.

Today, the company offers four lockable indexes, further empowering customers to take a level of control of their IUL policy results and giving financial professionals new tools to tailor strategies.

“Each of our index offerings is designed with a different return profile in mind,” Erickson notes. “Some use elements like volatility control to produce more predictable returns. Others have more exposure to the equity markets and with that comes the potential for larger swings.”

Allianz also takes a quality-over-quantity approach. Instead of overwhelming clients with dozens of options, the company offers a curated lineup of indexes, each rigorously tested and aligned with long-term policyholder needs.

“It’s not about offering the most options. It’s about offering the right ones,” Erickson adds. “Our lineup offers our customers the potential to earn credits regardless of the environment, whether that’s through a competitive fixed rate, an uncapped equity index or something in between. ”

Innovation Grounded in Customer Value

While technological innovation is a major driver, it’s customer value that ultimately guides Allianz’s product development. “My role is to take what’s technically possible and translate that into something that creates value for customers,” says Erickson. “We always ask, ‘How can this help someone achieve financial goals?’”

This philosophy shows up in multiple ways. Allianz’s IUL products allow policyholders to access available cash value through policy loans and withdrawals and allocate loans across different index allocations, tailoring their strategy during the accumulation or income phase of their contracts. Guaranteed bonuses, guaranteed loan rates, transparency in product design, and client-friendly illustrations further reinforce Allianz’s customer-first philosophy.

“Flexibility, transparency, and guarantees in the right places—that’s what sets us apart,” says Erickson. “We’ve been guaranteeing our loan rate on our IUL products for over a decade. That stability can give customers a sense of reassurance.”

It’s also evident in the company’s investment in support tools, like
Ensight, a digital illustration experience that helps financial professional visually communicate hypothetical results and potential outcomes.

“When financial professionals can show the potential value visually, it can help clients make more informed decisions—and strengthen that trust,” Erickson says.

Resilience in a Volatile World

Innovation alone isn’t enough—it must be sustainable and resilient. Allianz’s approach to risk management is built on a solid foundation of actuarial soundness and financial strength. The insurance carrier’s conservative investment philosophy ensures that product promises are backed by strong reserves and a stable bond portfolio.

But it’s on the hedging side where things get exciting. The AIM US dynamic hedging team has weathered multiple market downturns, including the 2008 financial crisis and more recent volatility. While some competitors were forced to halt sales or reprice their indexed products during market disruptions, Allianz’s internally managed hedges continued to perform as designed.

Always Thinking Ahead

Allianz doesn’t just react to industry trends. It anticipates them. The company has been at the forefront of product evolution, from volatility-controlled indexes introduced in 2014 to the more recent expansion of lockable index features.

Allianz is also deeply involved in shaping regulatory discussions, with internal teams that actively adapt to changes without compromising value or compliance. “I’ve personally worked through five major regulatory updates,” Erickson says. “No matter the environment, we’ve always found a way to deliver value. That’s the power of being engaged and agile.”

Innovation at Allianz also stems from cross-functional collaboration, pulling ideas from product teams, the hedging team, financial professionals, and beyond. “Sometimes the best ideas come from a single conversation,” Erickson notes. “Index Lock came from a discussion about a new index. Someone from the hedging team said, ‘We can let customers lock this in for free.’ That became one of our most powerful features.”

Built to Deliver Long-Term Results

Ultimately, all this innovation is paying off for customers. Since 2006, policies using Allianz’s indexed strategies have averaged a 6.4% crediting rate, compared to 3.75% in fixed accounts.² That 2.65% outperformance, year over year, can have a profound impact on long-term wealth accumulation.

Even if future index returns produce more conservative results, the added value can still be significant. “Even if we temper expectations and say 1.5% may be more realistic long-term, that’s still real, consistent added value for the customer,” Erickson says.

A Legacy—and Future—of Leadership

With more than 20 years of leadership in indexed products, Allianz continues to push the boundaries of what’s possible. The company continues to evolve with the needs of clients and financial professionals, leveraging internal knowledge , advanced technology, and a deeply held commitment to innovation with integrity.

“We take pride in launching products that are built to last,” Erickson says. “We want clients to be satisfied not just in year one, but in year ten, year twenty, and beyond.” For financial professionals and their clients, that can mean reassurance, knowing that the strategies they choose are backed by strength, stability, and a company built for the long haul.

“We’re proud of what we’ve built,” says Erickson. “And we’re just getting started.”

1 Q1 2020-Q4 2024 U S Retail Individual Life Insurance Sales BY CHANNEL with All Splits, based on annualized with excess premium, LIMRA.

2 Results based on 30,114 unique locks from 11/29/2019 – 12/31/2024. Potential interest will vary. Past results are not a guarantee of future results.

3 The average interest credited shows IUL insurance policy crediting history of Allianz® IUL policies from 3/1/2006 through 12/31/2024 and do not include policy fee and charges. We chose this time frame to ensure that we present the most complete 12-month data available for this study. Credits are based on actual caps, participation rates, and interest rates that have been applied to inforce policies. Products included in analysis include all IUL products sold since 2006. All products have not been available during the entire duration of the example shown.

Policy loans and withdrawals will reduce the available cash value and death benefit and may cause the policy to lapse, or affect guarantees against lapse. Withdrawals in excess of premiums paid will be subject to ordinary income tax. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject to ordinary income tax. If a policy is a modified endowment contract (MEC), policy loans and withdrawals will be taxable as ordinary income to the extent there are earnings in the policy. If any of these features are exercised prior to age 59½ on a MEC, a 10% federal additional tax may be imposed. Tax laws are subject to change and you should consult a tax professional.

Bonused products may include higher surrender charges, longer surrender periods, lower rates, or other restrictions that are not included in similar products that don’t offer a bonus. 

Although an external market index may affect your interest credited, your policy does not directly participate in any stock or equity or bond investments. You are not buying shares in any stock or index. 

Because the index value locks at the end of the day, the value used to determine your index credit may be higher or lower than at the time of the request. Exercising an Index Lock may result in a credit higher or lower than if the Index Lock had not been exercised. We will not provide advice or notification regarding whether to exercise an Index Lock or the optimal time for doing so.

Allianz Investment Management U.S. LLC provides investment management and hedging services to the broader Allianz Group.

Guarantees are backed solely by the financial strength and claims-paying ability of Allianz Life Insurance Company of North America.  

Products are issued by Allianz Life Insurance Company of North America, 5701 Golden Hills Drive, Minneapolis, MN 55416-1297.

This content does not apply in the state of New York.

Product and feature availability may vary by state and broker/dealer. 

For financial professional use only – not for use with the public.