Competition in the U.S. retail annuity market is ferocious, and that could add options for clients who want something different.
Lincoln Financial CEO Ellen Cooper talked about the impact of competition on annuity issuer product and strategy creativity today during a conference call with securities analysts.
The company's annuity sales increased 33% between the first quarter of 2024 and the first quarter of this year, to $3.8 billion.
But Alex Scott, an analyst with Barclays, asked about some industry executives' view that some insurers are offering prices that are not sustainable.
"The environment itself, first of all, continues to remain competitive, as it always has been," Cooper said during the call, which was streamed live online.
Cooper said Lincoln avoids price wars by focusing on earnings, not revenue growth, and by operating in "walled gardens," or sectors where the number of products on the shelf is limited.
Lincoln is also adding unique features, such as new indexed annuity crediting rate strategies, to help it compete based on something other than price, Cooper said.
About a year ago, Lincoln introduced a registered index-linked annuity contract.
"We've seen a number of competitors come that have come into that space," Cooper said. "It's been significantly more competitive."
But Lincoln's distribution network and unique crediting rate indexes made the product competitive, Cooper said.
Lincoln Financial CEO Ellen Cooper. Credit: Dave Moser
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