Will Other Smaller VA Sellers Follow Ohio National?

Regulatory relief and the Trump administration helped variable annuity sales reverse a long sales slide in the second quarter. However, analysts say it might be a mirage, as indexed annuities are likely to steal VA market share moving forward.

A National Association of Insurance Commissioners’ working group hopes to finalize a best-interest standard for annuity sales during a special two-day meeting next month in Chicago.

Citing more regulations and the low-interest-rate environment, Ohio National is getting out of the annuity business and laying off 300 people. The company’s departure from the market will benefit several competitors, such as Great American, AIG and Allianz, one analyst said.

Ohio National execs say regulations and low interest rates make annuities a tough sell. The company will focus on growing its life and disability insurance lines, as well as expand Latin America operations. The company recently named Christopher A. Carlson as president and CEO.

Ten years after the 2008 financial crisis, many clients are primarily worried about protecting their retirement nest egg. If they aren’t, their advisors say they are. Many have shifted toward “safer” products as they approach planning through a more balanced and holistic lens, a new survey finds.

Lincoln Financial uses IMOs to distribute many of the company’s products, such as life insurance and long-term care, and now, annuities. A deal is in place to distribute an index annuity from Lincoln to high-net-worth investors through a Georgia-based IMO.

After 17 consecutive quarters of declines, second-quarter sales of variable annuities rose – if ever so slightly – 2 percent to $25.8 billion compared with the year-ago period, according to new data. But analysts say a shift to index annuities is likely to preclude a strong rebound in VA sales.

Fixed index annuity sales topped the record set in the fourth quarter 2015 by 12 percent, according to LIMRA Secure Retirement Institute data. Growth was widespread with all of the top 10 manufacturers reporting double-digit growth from the first quarter 2018.

Sronger interest rates and fire sales among some insurance companies helped push index annuity sales to their best quarter ever, according to new data. Index annuities, which protect principal and yield limited gains tied to an external index, had been on a steady quarterly climb since the third quarter of last year.

Thirty-four percent of variable annuity owners cannot remember why they bought them, a new survey finds. But at least one analyst says that is merely a sign that VAs are very versatile, with a number of different uses, and that advisors are trusted and doing a good job.

Fixed annuity sales for the second quarter of 2018 were up 22 percent as compared to the prior quarter, and increased 20 percent as compared to the same period last year, based on preliminary sales figures reported by Wink’s Sales & Market Report.

Allianz will make its annuities available on the Envestnet Insurance Exchange, the second insurer to list its products there. Advisors at banks, broker-dealers, independent insurance agencies and registered investment advisors will be able to research Allianz annuities using the exchange, which is connected to Envestnet’s wealth management platform.

There is no limit to the number of agencies, bureaus, departments, commissioners and deputies standing ready to improve the lives of each person in ways they think they should be improved. Where does that leave annuities and the promise of guaranteed income?

Insurance commissioners are wrestling with rules that would allow insurers to illustrate indexed annuities using indices that have been around less than 10 years.

American Equity reported a healthy second quarter, but its late-May admission that it was negotiating with a potential buyer has distribution partners concerned. Meanwhile, the company plans to release new products during the third quarter.

New York and California insurance officials signal a steadfast willingness to fight for life insurance to be included in any NAIC annuity best-interest rule.

The National Association of Insurance Commissioners is attempting to come up with national annuity sales rules. Industry representatives express frustration with mixed messges and unclear rules.

A state insurance commissioners annuity subgroup will meet in Boston Saturday and attempt to reach a consensus on a controversial annuity sales model law. New York will be represented, although the state recently passed its own tougher rules in defiance of the NAIC.

The Department of Labor fiduciary rule is dead, but financial professionals selling products to retirement accounts need to be aware of new interpretations of the “five-part test” standard. DOL officials plan to be more strict in interpreting the test going forward, one industry expert says.

A new variable annuity from Sammons includes a rider making it possible for the client to receive payments before the account has been completely depleted. Company execs say it is an example of the creativity needed for VA sales to rebound.

Advisors seeking to match clients with the best annuity benefits need accurate expense-to-benefit ratio tools to help protect them in an era of regulatory pressure. For example, lifetime withdrawal riders allow retirees to receive income for the rest of their lives, but cost extra.

New York finalized its best-interest standard for annuity and life insurance sales this week. The rules have industry officials concerned that a ‘patchwork’ of different rules across different states could make cross-state sales a nightmare of paperwork.

The Department of Labor fiduciary rule is gone, but regulation of independent marketing organizations (IMOs) is likely to continue. That reality is forcing IMOs big and small to evolve into a more hands-on role with financial professionals than in the past, execs say.

While some companies are moving away from annuities, Prudential is redoubling its efforts. That means new products and new campaigns to educate advisors and consumers on what annuities can do for lifetime income, a company executive explained.

Envestnet is integrating annuities into its wealth management platform, giving advisors a more complete view of client retirement portfolios. The first insurer is offering annuities on the exchange, which one analysts says will spur others to follow.

Index annuities often come with lifetime income and enhanced death benefit features, but with a separate product fee. A new Athene product is breaking that mold and offering those additional features with no separate cost. Will it catch on?

Financial advisors need a new approach with which to engage clients about annuities, and a coalition of 24 insurers and asset managers has banded together to help.

The indexed-linked annuity market has been growing strong in recent quarters, and for AXA, that is both good and bad news. Good because the company is the leader in the market, but bad because other companies are jumping in the fray.