Change was a constant trend for the variable annuity (VA) industry in the first quarter of the year. Chicago-based investment research firm Morningstar U.S.A. (Morningstar) released their VA report earlier this week which highlighted changes in distribution and product development as carriers tweak their products to bring benefit levels down.

Forethought Financial had their first foray into the market after buying Hartford’s individual annuity business earlier this year. The ForeRetirement VA — their debut product — offers a lifetime guaranteed minimum withdrawal benefit with an age banded withdrawal percentage (5 percent for a 65 year old; 4.5 percent in the joint-life version) and two types of step ups.

New players in the market aside, shifts in the VA provider list “dominated” the quarter according to Morningstar. SunLife sold its VA business to Delaware Life Holdings — which is owned by Guggenheim Partners — while Hartford made an aggressive move to reduce its liability: Hartford offered a cash buyout to current contract holders in an attempt to get exposure off of their books.

Besides Forethought, new product launches were tame with many carriers focusing on fee changes to existing products and revisions to step ups and withdrawal percentages rather than dispatching new products.

Product development and adaptation was hearty with carriers filing 97 annuity product changes in the first quarter. This was a slight drop from the last quarter of 2012, yet a dramatic leap from just 59 in the first quarter of last year. Prudential, AXA Equitable and SunAmerica (which changed its name to American General) filed the most changes in the first quarter.