F&G Explains Registered Index-Linked Annuity Launch Strategy

What You Need to Know

Non-variable indexed annuity sales were up.
MYGA sales were up.
A RILA product is in the pipeline.

Interest rates are rising and banks are failing — and F&G Annuities & Life is preparing to launch a registered index-linked annuity.

Executives from the Des Moines, Iowa-based insurer talked about the RILA launch last week while going over its latest results in a conference call with securities analysts.

F&G performed well, with stable investment results and strong sales of non-variable indexed annuities and multi-year guaranteed annuities, F&G CEO Chris Blunt told the analysts.

Although broker-dealers distribute F&G’s non-variable products, the bulk of the company’s sales came through banks. “Banks are much more fixed-product-oriented,” Blunt said. “RILA tends to have a much bigger following in the broker-dealer community.”

More broker-dealers are agreeing to distribute F&G products because they know a RILA launch is coming, Blunt said.

What It Means

Distribution channel mechanics may affect the types of products your clients own.

The Company

F&G has ties to Blackstone. Fidelity National Financial, a title insurer, acquired F&G in 2020.

Fidelity National gave F&G a separate identity in December, distributing shares of F&G stock to its own shareholders.

The Earnings

F&G reported a $195 million net loss for the first quarter on $869 million in revenue, compared with $239 million in net income on $750 million in revenue for the first quarter of 2022.

Accounting rules now require F&G to put changes in the estimated value of investments and product benefits in its earnings.

The Market

Blunt said recent market volatility has helped F&G’s sales.

“Insurers and banks are the only folks that are legally allowed to use the G word, for guarantees,” Blunt said. “I think that’s a huge positive.”

Non-variable annuities are now paying higher rates than bank certificates of deposit, and that helps, too, Blunt said.

“I would suspect, given the capital pressures, that banks will likely be a little less competitive on CDs,” Blunt said.

Meanwhile, pressure on banks may help F&G’s investments by creating lending and investment opportunities for Blackstone and other non-bank capital providers, Blunt added.