(Bloomberg) — Prudential Plc, the largest U.K. insurer by market value, extended its lead in U.S. variable annuity sales at its Jackson National Life unit as rivals scaled back.
Jackson sold $12.7 billion of the retirement contracts in the first six months of 2014, an increase of 24 percent from a year earlier, according to data released yesterday by the Limra Secure Retirement Institute. Industrywide sales fell 4 percent to $70.4 billion.
Prudential Chief Executive Officer Tidjane Thiam is counting on profit from the U.S. and growth in Asia after individual annuity sales slumped in the U.K. when the government abandoned rules that had pushed consumers to buy the retirement products. In the U.S., the insurer has been emphasizing the breadth of options in its Elite Access product, including offerings from BlackRock Inc. and Jeffrey Gundlach’s DoubleLine Capital LP.
“Most of the growth right now is coming from the Elite Access,” Greg Cicotte, president of Jackson’s distribution arm, said in an interview. “If Elite Access continues to perform the way it has since launch, then I would be very happy and comfortable with us continuing to grow our variable annuity sales.” The company began offering the product in 2012.
Jackson’s pretax operating income in the first half of 2014 climbed 20 percent to $1.1 billion, fueled by increased annuity sales and higher assets under management, the Lansing, Michigan- based unit said Aug. 12.
MetLife Inc., the largest U.S. life insurer, was the top variable annuity seller in 2011, before scaling back as CEO Steve Kandarian worked to reduce the insurer’s risk from market slumps. Newark, New Jersey-based Prudential Financial Inc. was No. 1 in 2012, and Jackson took the top spot last year.
Lincoln National Corp. retained the No. 2 post as first- half sales fell 11 percent to $6.42 billion. TIAA-CREF came in third, with $6.38 billion. At American International Group Inc., variable annuity sales rose 12 percent to $6.17 billion, putting the firm at No. 4.