AXA Equitable: Annuity Sales Momentum Looks Good

AXA Equitable Holdings Inc. is now getting about 60% of its variable annuity sales from the sale of contracts that offer no guaranteed minimum living benefits or guaranteed minimum death benefits.

Executives from the New York-based insurer talked about the evolution of the company’s annuity business today during a conference call the company held to brief securities analysts on its earnings for the second quarter.

AXA S.A. of Paris acquired AXA Equitable, and took its stock off the New York Stock Exchange, in 1991. AXA Equitable returned to the New York Stock Exchange May 10, after AXA sold a large portion of its stock in the company to the public through an initial public offering (IPO).

(Related: AXA Equitable Shares Debut on New York Stock Exchange)

AXA Equitable held a conference call with analysts in June, to go over earnings for the first quarter, but this was the earnings call for the quarter that included the IPO.

Mark Pearson, AXA Equitable’s president, told analysts the company is doing well, and believes it is well-positioned to handle any changes in variable annuity reserving standards that may come out of the National Association of Insurance Commissioners.

Individual retirement unit earnings were strong in the second quarter, thanks to higher account values, better variable annuity margins and efforts to hold down expenses, Pearson said.

“Sales momentum also picked up in the second quarter, stemming from new distribution partnerships,” Pearson said. “And the overall sales mix remained good.”

Earnings

AXA Equitable is reporting $255 million in net income for the second quarter on $3 billion in revenue, compared with $608 million in net income on $3.9 billion in revenue for the second quarter of 2017.

The earnings include a number of unusual items related to the spinoff from its parent.

Operating income, which excludes the unusual items, increased to $506 million, from $399 million, the company says.

Here are some of the details from the AXA Equitable earnings release financial supplement:

• Sales of individual retirement products without guarantees fell to $1.23 billion, from $1.28 billion, but sales of Investment Edge products increased to $138 million, from $107 million.
• Individual retirement commissions and distribution-related payments fell to 2.6%, to $152 million.
• Sales of life insurance increased to $125 million, from $101 million.
• Sales of indexed universal life increased to $65 million, from $55 million, and IUL renewals increased to $56 million, from $45 million.
• Life insurance commissions and distribution-related payments increased 10%, to $75 million.

Personnel

In related news, AXA Equitable announced that Nick Lane, the head of the AXA Japan operation, will be succeeding Brian Winikoff as the head of the life, retirement and wealth management organization.

Lane worked in the United States as the head of the company’s commercial business lines and its affiliated advisor sales force before going to Japan, Pearson said.

Resources

More information about AXA Equitable’s earnings, including a link to a recording of the earnings call, is available here.

— Read AXA Equitable Posts First Earnings Since the IPO, on ThinkAdvisor.

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