Annuity Industry Had Volatile Year in 2010

Prudential, MetLife among top producers; The Hartford, MassMutual suffer low sales

The annuity industry was marked by volatility in 2010, a report released Friday by SNL Financial found. SNL studied 2010 data from U.S. life insurers to measure volatility in the industry.

Total direct annuity considerations, including first-year, single-premium and renewals, fell 1.2% over 2009, and fell over 13% from 2008.

Prudential's first-year and single-premium considerations increased more than 135% over 2009, the largest increase among providers. In spite of that, MetLife remains the top provider with $21.5 billion in considerations. Jackson National, Lincoln National and Allianz all enjoyed increased considerations in individual annuities.

2010 was not so good for other insurers. Low interest rates depressed fixed deferred annuity sales for New York Life Insurance Group, and after a better-than-normal year in 2009, there was no place to go but down.

The Hartford, where direct first-year and single-premium annuity considerations have been falling since 2007, also suffered from the low-interest rate environment. Sales were also restrained by a decision to shift variable annuity products away from living benefit guarantees, SNL found.

Fixed annuity sales also hurt Pacific Mutual Holding Co., andING Group stopped selling variable annuities in March 2010 "as part of a global risk-reduction plan," the report found.

MassMutual suffered low sales in both fixed and variable annuities, although losses were partially offset by increased sales of immediate annuities.

An Insured Retirement Institute study released in March declared variable annuity sales set an all-time asset record in 2010 with $1.5 trillion in assets.

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