Are Some Annuity Issuers' Prices Crazy?

Rowan referred to the "poor behavior of others" and said, "We do worry about contagion."

Thanks to Rowan's comments, executives at companies like F&G Annuities & Life, Jackson, Lincoln Financial and Prudential received few analyst questions about troubling topics like the possible impact of war in the Middle East during their companies' earnings calls. Instead, analysts asked about whether the current level of competition in the U.S. individual annuity market is really crazy.

The executives' verdict: They are not eager for their companies to offer the best deals on multi-year guaranteed annuities.

What it means: Retirement savers who want MYGA contracts may find that some insurers offer much better prices and crediting rates than others.

Multi-year guaranteed annuity contracts: A MYGA contract is an annuity that offers a fixed rate of return for a period of 1-year or longer.

The calls: Ellen Cooper, the CEO of Lincoln Financial, received the most direct question about Rowan's remarks.

"I obviously can't speak to the comment of another peer," Cooper said. "But, having said that, we know that there are certain pockets of the annuity product segments where it's a pure price competition play. And one of those examples at the moment is MYGA."

There are also pockets of intense price competition in the market for registered index-linked annuities, Cooper said.

A RILA contract is an annuity that's registered as a security with the SEC, can expose the owner to market-related loss of principal, and ties returns to the performance of one or more investment indexes.

Cooper said Lincoln Financial is responding to the MYGA and RILA competition by working to differentiate its product features and distribution strategies and "really having a deliberate focus on the more profitable segments of this market."

"You're going to hear us over and over again reinforcing the fact that we are not focused on top-line growth," Cooper said. "We are focused on balancing growth with profitability."

Executives at Prudential Financial could avoid questions about MYGA contracts — the company has paid for a reinsurer to take its MYGA risk — but Andrew Sullivan, the CEO, did get a question about competition in the RILA market.

"The RILA market is competitive," Sullivan said. "You don't go from five competitors to 25 without it having a competitive effect. And we've seen some well-established players enter the space. We've seen some level of aggressive pricing. We always take a very consistent, disciplined approach, to ensure that we generate profitable sales."

Prudential is trying to use distinctive RILA features to avoid having to compete solely based on price, Sullivan said.

Laura Prieskorn, Jackson's CEO, went into more detail about her company's efforts to its RILA contracts and fixed indexed annuities apart.

The recently updated RILA product design "has flexibility and choice that is a differentiation from other products that you see in the market, in terms of crediting methods, the protection level and the number of indexes that we have available for choice," Prieskorn said. "On the FIA front, that launch included a living benefit option that can be elected not just at sale, but also post-sale, which is a unique feature for the FIA product. "

Christopher Blunt, the CEO of F&G, said the fact that 11,000 Americans are turning 65 every day provides a "structural tailwind" for annuity sales, but Conor Murphy, F&G's chief financial officer, noted that F&G is trimming its sails in response to changing market winds.

F&G moderated MYGA sales in the first quarter to "allocate capital to the highest-return opportunities," Murphy said.

"We expect multi-year guaranteed annuity sales to continue moderating, given the current rate environment," he said.