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September 05, 2017 at 11:12 AM
Kevin Kennedy is one of the life insurance industry executives in charge of pulling the U.S. individual annuity market out of its current slump, in time to do something for the baby boomers, and older members of Generation X, who are rushing toward retirement age.
Kennedy, head of individual annuities at AXA US, talked about the challenges facing the market recently in a telephone interview.
(Related: U.S. Individual Annuity Sales Drop Slows: LIMRA)
Kennedy has been involved in annuity sales at AXA since 2004, when he started out as a divisional sales manager. He began running the U.S. individual annuities operation in January.
AXA US is an arm Paris-based AXA S.A., one of the world’s largest financial services organizations. In the United States, the company ruffled some feathers in 2011 by introducing the buffer annuity, a product that provides somewhat more protection against an investment index drop than a typical variable annuity and somewhat less protection than a typical indexed annuity, in return for upside participation caps that are higher than the caps that come with the typical indexed annuity.
New sales figures from LIMRA show that the company’s overall individual annuity sales increased to $5.5 billion in the second quarter, from $5.1 billion in the second quarter of 2016. Total U.S. individual annuity sales fell 9.8% over that same period.
(Photo: Thinkstock)
The increase at AXA US helped push the company to fifth place in the LIMRA sales rankings, from sixth place a year earlier.
Here’s a look at three things Kennedy is saying about the individual annuity market now.
1. He’s hoping the firmer-looking second-quarter annuity sales figures mean something.
LIMRA, which is a nonprofit industry consortium, and Wink, a private research firm, recently came out with survey figures that tell a similar story: U.S. individual annuity sales were lower than they were in the second quarter of 2016, but the year-over-year decline was much smaller than in the first quarter.
“Maybe things are starting to normalize,” Kennedy said. “People realized that there are problems out there, and that annuities solve these problems.”
2. He thinks people who are in their 40s or 50s now are probably similar to people who were in their 40s or 50s in earlier generations.
Kennedy said he is skeptical about the idea that today’s financial services customers are much different from the customers who were buying financial services products 20 years ago.
“I have not seen much of a shift,” he said.
