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Eric Thomes. (Photo: Allianz Life)

Life Health > Annuities > Variable Annuities

Annuity Supply Is Holding Up Well: Eric Thomes

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Eric Thomes is one of the people in charge of helping Americans prepare for the future.

Thomes is the chief distribution officer at Allianz Life Insurance Company of North America and CEO of its Allianz Life Financial Services affiliate. He leads sales and distribution for all kinds of Allianz Life products, through all kinds of distributors and retail producers.

The company generated $7.1 billion in non-variable indexed annuity and registered index-linked annuity sales in the first half of this year, according to LIMRA.

Thomes has a bachelor’s degree in business management from St. John’s University in Minnesota. He got his start in insurance as an independent agent.

He joined Allianz Life in 1995. Since then, he has been vice president of sales for the company’s long-term care division, vice president of sales for the Southeast region, senior vice president of strategic accounts and senior vice president of field marketing organization distribution.

Today, Thomes serves on the Allianz Life field advisory board and the board of the Minnesota-North Dakota chapter of the Alzheimer’s Association. He’s a past chair of the National Associate for Fixed Annuities.

He answered questions via email about the state of the annuity market, the effects of volatility on marketing strategies, and the effects of all of those ups and downs on client and agent stress levels.

The answers to the questions in this interview have been edited.

THINKADVISOR: Overall, how does annuity demand look right now? Are there any particular pockets of strength or weakness?

ERIC THOMES: Demand for annuities continues to be very strong. With continuing volatility in the market, annuities are increasingly seen as an indispensable way to control risk.

The traditional diversification approach with a 60/40 mix of equity and bonds is being rethought.

Annuities are being added into the mix for protection from market downturns.

The registered index-linked annuity (RILA) and fixed indexed annuity (FIA) segments are showing particular strength as the demand for protection and guarantees grows.

The spiking interest rates have also renewed interest in multi-year guaranteed annuities.

How is annuity supply holding up? Does it look as if any players are pulling back?

Supply is holding up well.

Based on industry sales we have seen a significant increase in the demand for annuities.

We aren’t seeing a pullback in supply like we saw in variable annuities 10 to 15 years ago, as part of the global financial crisis.

Over the last three years, total annuity sales in the U.S. have grown around 5% and fixed products have grown 11%, according to LIMRA. Recently, total U.S. annuity sales grew 25% from the first quarter of this year to the second quarter, and fixed sales were up 48% in that time.

Allianz Life and other carriers continue to offer strong consumer value for new business. The increase in interest rates is allowing carriers to offer more attractive benefits on their contracts.

Overall, rising interest rates and market volatility have helped drive annuity industry growth, especially for fixed products, FIAs, and RILA products.

How is Allianz Life advertising evolving right now? Are campaigns changing at all in response to new concerns about interest rates, geopolitics and increased investment market volatility?

We have always looked to advertising as an extension of our overarching marketing strategy. We want to equip financial professionals with the timely information they need to best support their clients to help them manage risk.

Protections and guarantees are backed by the financial strength of the issuing company.

The idea behind our messaging is to share information that is useful and actionable for financial professionals that reflects the current economic environment.

A great example of this is a new Inflation Playbook cross-channel campaign we’re launching. The new campaign will provide financial professionals customized support along with practical strategies and tools so they can help their clients combat the risks that rising costs and market volatility can create.

What’s happening to retail agent and advisor stress levels?

Consumers are really worried about volatility, protection and performance.

Our latest Quarterly Market Perceptions Study found that 62% of Americans worry that a major recession is right around the corner. And 71% said they’re keeping some money out of the market to protect it from loss.

That certainly puts additional stress on financial professionals who are trying to find effective solutions for their clients. The stress on consumers feeds directly into the stress of financial professionals.

At the same time, finding attractive and effective ways to offer protection in this market is difficult. Consumers are also expecting more from financial professionals — people are looking for holistic financial guidance.

Is Allianz Life doing anything differently to try to keep agents and advisors calm?

We want to help financial professionals manage risk for their clients.

We think that innovation — not only in products, but in how much control we offer over contracts — is critical to keeping financial professionals and their clients calm through a very challenging economic environment.

We are continuing to embrace fintech and the way these tools can help financial professionals illustrate the value of insurance and other protections with clients.

We have had an ongoing focus on providing financial professionals with the ability to help their clients make real-time decisions. For example, the ability to lock in gains allows financial professionals to be more proactive with clients and capture gains when they happen.

Eric Thomes. (Photo: Allianz Life)


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