VA carriers tweaking products at 'inflection point'

Many carriers are shifting away from market sensitive, capital-intensive products to classic, lower risk, protection products. On the heels of selling its VA distribution business earlier this year to Forethought, Hartford also recently announced an annuity buyout effective for the first quarter of this year. Transamerica and AXA made similar moves. Also, Forethought’s conspicuously similar VA contracts are set to roll out in the beginning of March.

Morningstar also reported that in November, Jackson National suspended exchange inflow activity for one month. AXA made a similar move while Allianz, MetLife, John Hancock and Prudential joined them in limiting additional contributions. SunAmerica also confined contributions for its lifetime guaranteed minimum withdrawal benefit to one year from the first two years.

And as many carriers tinker in their respective VA workshops, looking for what may appear as trivial ways to remain competitive in the low interest rate environment, Allianz and VALIC have seized the opportunity to buck the trend and are making their VA products more generous. In October, Allianz raised the fix percentage step on the the income protector GMWB to 6 percent from 5 percent and VALIC decreased the fee on its IncomeLock 8 lifetime GWMBs to 1.10 percent from 1.30 percent. Fees also dropped on its IncomeLock 6 benefits.