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November 14, 2023 at 04:37 PM
For U.S. issuers of retail individual annuities, the third quarter came and went without much of a fuss.
As political and geopolitical storms raged in the outside world, and the U.S. Department of Labor proofread its new draft fiduciary rule regulations for retirement savings rollovers, the tailwinds and headwinds merged to create relatively gentle breezes inside the individual annuity market.
Publicly traded issuers got through the conference calls they held to go over results for the quarter with securities analysts without much of a fuss.
Here’s a look at seven things the executives of the companies said during the calls.
1. The difference between fixed annuity sales trends and variable annuity sales trends varies from company to company.
Ellen Cooper, the chief executive officer of Lincoln Financial, said fixed annuity sales there increased 23% between the third quarter of 2022 and the latest quarter, mainly because of product strategy decisions and distribution partner selection.
At some other companies, registered index-linked annuity contracts were hot.
Myles Lambert, the chief marketing officer at Brighthouse Financial, said the company’s Shield family of RILA products has been doing well because consumers want some protection against market volatility but want to get back into the investment market.
Some asset flows are shifting from non-variable indexed annuities to RILA products, Lambert said.
LIMRA has reported that total sales increased 21% between the year-earlier quarter and the latest quarter, with non-variable sales increasing 38%, to $64 billion; RILA sales increasing 11%, to $13 billion; and traditional variable annuity sales falling 20%, to $13 billion.
The RILA and non-variable annuity increases and the traditional variable annuity decrease were all smaller than in the second quarter.
2. Insurers are happy with the current performance of their registered index-linked annuity contracts.
Jim Cracchiolo, the CEO of Ameriprise, said sales of RILAs and of variable annuities without living benefits were 18% higher in the latest quarter than in the third quarter of 2022.
Laura Prieskorn, the CEO of Jackson Financial, said “continued momentum in RILA sales” helped lead to a 6% increase in the company’s retail annuity sales between the second quarter of the year and the third quarter.
3. New players are still entering the market for registered index-linked annuities.
Chris Blunt, the CEO of F&G Annuities & Life, said his company will be launching a RILA product through broker-dealers sometime in the first quarter of 2024.
4. The overall level of competition may be tolerable, and profit margins may be attractive, even in the RILA market.
At Corebridge Financial, CEO Kevin Hogan said the state of annuity distribution looks good.
“The way I would define the rationality of competition is what we’re seeing as margins on new business, and we continue to see very attractive margins on the new business,” Hogan said.
