What You Need to Know
- Athene sees other insurers becoming more aggressive this year.
- The company is interested in expanding RILA distribution.
- American Equity is adding an annuity that will offer global risk-controlled sector-specific index options.
Executives at Athene Holding Ltd. say that they are happy that the company sold many annuities in the fourth quarter of 2020, and that they would like to see the company sell many more annuities this year.
Executives from the Hamilton, Bermuda-based insurer and reinsurer talked about how they see the U.S. individual annuity market Wednesday, in written responses to questions tied to the company’s latest earnings release.
Athene (NYSE: ATH) is reporting $1.3 billion in net income for the fourth quarter of 2020 on $8.6 billion in revenue, compared with $464 million in net income on $3.3 billion in revenue for the fourth quarter of 2019.
Athene uses “inflows,” or totals of all money paid into products during a given period, as a measure of sales.
Flow associated with sales of big group annuities to employer-sponsored pension plans, or “pension risk transfer” deals, increased to $2.2 billion in the latest quarter, from $809 million for the year-earlier quarter.
Flow into retail annuities increased to $2.3 billion, from $1.1 billion.
Expanded distribution through banks and broker-dealers helped Athene increase sales of non-variable indexed annuities, Athene said in the earnings announcement.
“Athene remains a leader in the fixed annuity marketplace, committing capital to new insurance amid still fragile economic conditions and serving as a source of strength for consumers seeking savings products that can increase their financial security,” the company said.
Athene’s Executives’ Thoughts
Executives at some other publicly traded annuity issuers say they are now uncomfortable with assuming large amounts of additional annuity guarantee risk, because of low interest rates, ups and downs in the stock market, and new accounting rules that make the income statements of annuity issuers look more volatile.
Bill Wheeler, Athene’s president, said in an email that Athene believes it’s well-positioned and “has competitive advantages that are driving a much different result for us than others are experiencing.”
According to figures from the Secure Retirement Institute, “Athene placed first for fixed indexed annuity industry sales in the second and third quarters, and we believe our strong fourth quarter will place us in a similar position when full-year industry results are published,” Wheeler said.