NU Online News Service, Aug. 6, 2003, 5:08 p.m. EDT – Protective Life Corp., Birmingham, Ala., has joined the long list of life insurers that have complained this quarter about the difficulties of selling fixed annuities at a time when insurers’ own investment yields are painfully low.
The company is reporting $59 million in net income for the second quarter on $526 million in revenue, up from $54 million in net income on $471 million in revenue for the second quarter of 2002.
Sales of variable universal life fell to $1.1 million, from $1.9 million, but sales of term life increased to $33 million, from $10 million, and sales of universal life increased to $9.4 million, from $7.2 million.
Sales of variable annuities increased to $94 million, from $84 million.
But sales of immediate and deferred fixed annuities sank to $47 million, from $276 million.
The drop is due to “the company’s continued focus on earning adequate returns in a challenging interest rate environment,” Protective says.
Eventually, “rising interest rates may rekindle consumer demand for fixed annuity products,” says Protective Chairman John Johns.