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Laura Prieskorn. Credit: Jackson

Life Health > Annuities > Variable Annuities

At Jackson, RILA Buyers Are Different

By Allison Bell

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Executives from Jackson Financial said Wednesday that registered index-linked annuities (RILAs) appeal to a somewhat different market than the other annuities the company writes.

“The average age of a RILA policyholder is five years younger than our traditional variable annuity buyer,” Jackson CEO Laura Prieskorn told securities analysts during a conference call.

Prieskorn talked about the RILA market while going over earnings for the second quarter.

What It Means

RILAs might be helping some clients get serious about retirement income planning earlier.

The Earnings

Accounting rules now require Jackson to include fluctuations in the value of benefits promises and derivatives arrangements in net income.

The Lansing, Michigan-based insurer’s adjusted earnings exclude those fluctuations.

Jackson is reporting $283 million in adjusted operating earnings for the second quarter on $2.6 billion in fee income, premiums and investment income, compared with $407 million in adjusted operating earnings on $2.7 billion in fee income, premiums and investment income for the second quarter of 2022.

Total annuity sales fell to $3.1 billion, from $4.1 billion in the year-earlier quarter.

RILA sales increased to $541 million, from $490 million.

Variable annuity sales fell to $2.4 billion, from $3.6 billion.

Combined sales of traditional fixed annuities and non-variable indexed annuities increased to $115 million, from $19 million.

Prieskorn’s Perspective

Prieskorn indicated, indirectly, that price competition in the market for fixed and non-variable annuity markets is fierce.

“Fixed annuity sales remain relatively modest as our pricing reflects our prudent investment approach,” she said.

She said RILA sales have benefited from the company adding or reviving relationships with 3,200 advisors since the RILA products were introduced in October 2021.

The Annuity Buyer Age Issue

Annuity issuers guard details about annuity buyer demographics closely.

LIMRA reported in May that typical U.S. annuity buyers are in their early 60s.

The Transamerica Institute, a research center with ties to Transamerica, one of Jackson’s competitors, included some age distribution information in a report it released in July.

The institute surveyed 3,607 consumers ages 18 and older who were saving for retirement outside of work. About 22% of the baby boomers in that group and 10% of the younger participants said they had individual annuities.

Laura Prieskorn, CEO of Jackson Financial

Allison Bell

Think_Allison

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