Credit: New York Stock Exchange
Equitable executives today reported that new players in the hot market for registered index-linked annuities tend to follow a predictable path.
Nick Lane, Equitable's president, said the company watches competitors' prices and other competitive trends carefully.
"We saw players enter at the tail end of 2024, so, we've been operating what would say is the new normal for over a year," Lane said. "Traditionally, we see new entrants offer teaser rates and then revert to more sustainable levels, and we saw this dynamic in the fourth quarter for those who entered in the beginning of the year."
Equitable believes that its position in the market, the nature of its distribution network and the nature of the investments backing its annuities give it an edge that's hard to replicate, Lane said.
Lane talked about the habits of new RILA issuers during a conference call that Equitable held to go over its earnings for the fourth quarter with securities analysts. It streamed the call live and posted a recording on its website.
What it means: When new RILA issuers offer great deals, those deals may not last long.
RILAs: Equitable created the market for modern RILA contracts, which are registered as securities, can link the crediting rate to the performance of one or more investment indexes, can expose the contract owner to market-related loss of principal, and can charge the contract owner extra for any contract value buffers or guarantees.
The earnings: The top-level company, Equitable Holdings, is the parent both of the Equitable insurance business and of the AllianceBernstein investment management business.
Equitable reported operating earnings of $513 million for the latest quarter on $3.3 billion in revenue, compared with $515 million in operating earnings on $3.6 billion in revenue for the fourth quarter of 2024.
Assets under management were $999 billion, up from $919 billion.
RILA sales increased to $4.2 billion, from $3.7 billion.
Sales of traditional variable annuities fell to $962 million, from $1.1 billion.
Wealth planners: Equitable reported that the number of wealth planners increased 12%, to 920.
The wealth planners' productivity increased about 8%.
Asset management: Other financial services companies have been talking about expansion of actively managed exchange-traded funds. Equitable noted that AllianceBernstein added active ETF strategies and now has $14 billion in active ETF assets under management in 24 active ETF strategies.
Credit: New York Stock Exchange
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