Living benefits guarantees have become about as common in the U.S. variable annuity (VA) market as automatic transmissions are in the U.S. automobile market.

Life insurers have seen offering the guarantees as a way to distinguish VA products from mutual funds, by giving annuity buyers access to retirement income insurance.

But Symetra Financial Corp., Bellevue, Wash. (NYSE:SYA) recently made a splash by announcing that it will be selling a line of low-cost VA contracts without built-in guaranteed living benefits (GLB) features or GLB riders.

Symetra executives took questions about the guarantee-free annuities during the company’s recent second-quarter earnings call.

“How do you expect to … gain traction given the market focus either on living benefit guarantees or a more competitive, cheaper price mutual fund?” Chris Giovanni, an analyst at Goldman Sachs Group Inc., New York, asked during the call.

Tom Marra, Symetra’s president, said Symetra wants to get into the VA living benefits market but is looking for the right time to jump in.

“The VA benefit world is getting better, almost approachable, but we still get the feeling that competitors will continue to scale back or increase price or some combination,” Marra said.

For now, Marra said, Symetra believes the no-guarantee VA market may be an under-penetrated niche.

Dan Guilbert, an executive vice president in Symetra’s retirement division, said the company studied the VA market carefully before introducing the no-guarantee VA contracts.

“We looked at several factors, including financial risk for the insurer, running the product, consumer value, and cost and complexity,” Guilbert said.

Symetra decided there seems to be room for growth in demand for low-cost VA products that come with strong investment choice, Guilbert said.

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