Back in July when it announced the sale of Lincoln Benefit Life Co. and thus its exit from the life and annuity business, Allstate Corp. also stated it intended to find a third-party company to offer retirement products, like fixed annuities, to its customers. Today, the insurer reported that it has entered into a strategic alliance with ING U.S. to do just that.
Beginning in January, Allstate will offer ING U.S.’s suite of fixed annuities, including ING Single Premium Immediate Annuity, ING Secure Index and ING Lifetime Income. By year’s end, Allstate plans to cease sales of its Growth and Income Protector, IncomeReady and RightFit annuities.
When Allstate agreed to sell Lincoln Benefit Life to Resolution Life Holdings Inc. for $600 million, the move signaled its exit from the customer segment served by independent life insurance and annuity agencies.
In its third-quarter earnings statement, Allstate noted that net income available to shareholders for the quarter was $310 million, or 66 cents per diluted common share, compared to $723 million, or $1.48 per diluted common share, in Q3 2012. It attributed the decline mostly to an estimated $475 million after-tax loss on the sale of Lincoln Benefit Life, which it stated was partially offset by the favorable impact from changes in employee benefit plans. The company reported that annuity returns improved in the quarter due to higher limited partnership income, but “the long-term outlook remains challenged by continued low interest rates.”
Those same low interest rates don’t seem to be having an impact on fixed annuity sales, at least as charted in the third quarter by Beacon Research. Sales in that category totaled $22.6 billion in Q3, up 31 percent from the previous quarter and 35.2 percent from a year ago.
Chad Tope, president of ING U.S. annuity and asset sales, said in an interview that the alliance with Allstate diversifies the company’s distribution network and gives it access to Allstate’s representatives and clients across the country.