A quarter full of changes in the VA realm

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.