Marc Rowan, the CEO of Apollo Global Management — a company that brags about its comfort with the complicated worlds of private credit and high finance — has suggested that the market for multi-year guaranteed annuities has become a crowded, commoditized market.
Chris Blunt, the CEO of F&G Annuities & Life, emphasized during his company's second-quarter earnings call that F&G "flows out" the vast majority of its MYGA business to reinsurers.
Edward Massaro, the CEO and chief investment officer of Knighthead Insurance Group, a company best known as a reinsurance provider, wants to make his company a significant player in the U.S. MYGA market.
"We think it's a good, solid market," Massaro said during a recent interview. "It is competitive. But we think there's room for solid new competitors."
What it means: The U.S. annuity market is still attracting newcomers. That could increase the number of options available to clients who are willing to buy from them.
MYGAs: Many clients like the idea of locking in a fixed rate for a specified contract term.
The RILA market gets more press, and RILA sales increased 16% between the second quarter of 2024 and the latest quarter, according to issuer survey data compiled by Wink.
MYGA sales increased just 11% year over year.
But RILA contracts accounted for only $18 billion of the U.S. individual deferred annuity sales made during the quarter.
Retirement savers spent $45 billion on MYGA contracts. The MYGA market is still more than twice as big as the RILA market.
Knighthead's history: Knighthead Capital Management, an asset manager, was founded in 2008 and ended 2024 with $16 billion in assets under management, according to its Form ADV filing.
Knighthead International, an affiliate that provides life insurance and annuities for people who live outside the United States, came to life in the Cayman Islands in 2014.
Knighthead formed Knighthead Insurance Group, a company that provides reinsurance for insurance companies all over the world, in 2017.
The company acquired Merit Life, a Connecticut-based life insurer, earlier this year and formed Knighthead American Life Insurance Co.
Knighthead International as a whole generated $509 million in revenue in 2024 on $5.9 billion in assets.
The strategy: Knighthead's insurance business is operating in the United States as Knighthead Life, a company with offices in Charlotte, North Carolina, and an A- rating from AM Best.
It's now focusing on sales of the Staysail MYGA contract, a product that offers a choice of three-year, five-year and seven-year contract terms.
The thinking: Knighthead sees plenty of room to buy assets that can support profitable MYGA contracts, Massaro said.
"There's spread still to be made," Massaro said.
Knighthead uses derivatives to manage interest rate risk. Supplier activity in that market is strong, Massaro said.
One difference between Knighthead Life and many other newer and smaller MYGA issuers is that Knighthead Life is the arm of a company with extensive experience in the U.S. reinsurance market and extensive experience with managing U.S. life and annuity issuers' assets, he said.
On the marketing side, Knighthead believes the way to move forward is to appeal to independent marketing organizations and midsize financial institutions with solid products, a good credit rating, good communications, a clear compensation schedule and a patient attitude.
"We're not in a rush," Massaro said.
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