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August 12, 2014 at 04:10 PM
A single stat sums up the dramatic transition the annuity marketplace has seen in recent years: MetLife Inc., which ranked No. 1 in annuity sales for Q1 2012 and Q1 2013, has dropped to the No. 7 spot for the quarter ending March 31, 2014, following a 42 percent decline in sales year over year.
To be sure, this drop is not wholly unexpected, as new analysis from SNL Financial notes. MetLife has been forthcoming about its desire to limit exposure to the U.S. annuity market as it attempts to determine just how much risk it wants to assume going forward. At an investor day held in early June, CEO Steven Kandarian assured attendees that he was committed to staying in the annuity business, and that he anticipated business would begin to grow again in 2015.
Other movements among the top ten annuity sellers point equally to a market in turmoil. Jackson National Life Group bounded into first place with sales of $6.76 billion in Q1 2014, a 26.5 percent increase over Q1 2013, when the carrier placed third. Tidjane Thiam, CEO of Jackson’s parent company Prudential Plc, noted that sales of variable annuities had been particularly successful, due in large part to the company’s Elite Access annuity line, which offers over 100 investment strategies and has been gaining popularity rapidly. The product accounted for 17.2 percent of all variable annuity sales in Q1 2014.
This growth in the variable space stands in marked contrast to a number of the largest U.S. insurers. Prudential Financial, ranked fifth on SNL’s list, saw a 27 percent decline in year-over-year annuity sales, due in large part to a drop in variable sales that has been building over the past several years. Gross variable sales fell from $20.0 billion in 2012 to $11.5 billion in 2013. MetLife, too, has seen variable sales drop by more than 50 percent in recent years, from $28.4 billion in 2011 to $10.6 billion in 2013.
Declines like these made space for new annuity sales leaders. AEGON NV climbed to second place, with $5.05 billion in sales in the first quarter, up from fourth and sixth place in Q1 2013 and Q1 2012 respectively. Following just behind, American International Group (AIG) saw the second biggest boost across the list, with a growth rate hovering just under 36 percent year over year. The company brought in $4.5 billion in total annuity sales in Q1 2014, enough to move it from eighth place in 2013 to third place in this year’s tally.
Other industry players saw meaningful rises and falls, too. Read on to see who ranked where.
No. 1: Jackson National Life Group
Annuity considerations Q1 2014: $6.76 billion
Annuity considerations Q1 2013: $5.34 billion (ranked 3rd)
Change, Q1 2014 vs. Q1 2013: 26.54 %
No. 2: AEGON NV
Annuity considerations Q1 2014: $5.05 billion
Annuity considerations Q1 2013: $4.39 billion (ranked 4th)
Change, Q1 2014 vs. Q1 2013: 15.05%
No. 3: American International Group
Annuity considerations Q1 2014: $4.50 billion
Annuity considerations Q1 2013: $3.31 billion (ranked 8th)
Change, Q1 2014 vs. Q1 2013: 35.79%
Image credit: Tidjane Thiam, Group Chief Executive for Prudential, United Kingdom, the parent company of Jackson National Life, speaks during a session ‘Redesigning Financial Regulation’ at the World Economic Forum in Davos, Switzerland on Saturday Jan. 30, 2010. (AP Photo/Virginia Mayo)
