A top executive at American International Group says U.S. annuity sales seem to be firming up.
Kevin Hogan, the chief executive officer of AIG’s Life & Retirement unit, talked about the sales pipeline Tuesday, during a conference call the company held to go over its latest earnings.
(Related: AIG’s Life and Retirement Business Made $650 Million: Earnings)
Hogan told the analysts that, because of the effects of COVID-19 and the pandemic-related social distancing rules, “the quarter was the lowest in memory.”
But, “towards the latter part of June, we saw some real signs of life,” Hogan said.
The bank channel suffered the most serious disruption: AIG annuity sales through that channel fell about 60%.
But sales through the bank channel in July were almost twice as high as sales in June, Hogan said.
At financial advisors, broker-dealers and insurance marketing organizations, sales fell about 40%, Hogan said.
AIG responded to falling interest rates by repricing its products quickly. Now, other issuers have caught up with repricing, and that may be starting to level the playing field, Hogan said.
Many advisors have now shifted to virtual sales practices, Hogan added.
Thanks to the marketwide pricing realignment, and the sales system shift, sales through advisors, broker-dealers and IMOs also looked much stronger in July than in June, Hogan said.
“The pipeline is growing,” Hogan said. “Our sales of annuities per day continued to increase. So, we’re pretty optimistic that, if conditions continue the way they are, we’ll see recovery in July over June, and in the third quarter over the second.”