Immediate annuities, also known as income annuities and payout annuities, can replace disappearing corporate pensions, but sales have been tepid. Insurers have responded with some significant bells and whistles.
Principal Life Insurance Co. plans to roll out a variable annuity called Principal Lifetime Income SolutionsSM on Aug. 1.
For years, Lincoln Financial has effectively been raising prices on its variable annuities, yet consumers keep buying. The companys VA business exceeds desired levels now, so further price increases have been announced: cutbacks in benefits offered to consumers. The expected result is a boost in second-quarter business but a slowdown in the second half of 2013.
New product focuses on those approaching or already in retirement and is designed for maximized guaranteed lifetime income.
The programs generated a generous $521.6 million in income for the banks in 2012, the most they have ever produced in the five years that such data has been collected.
Asset managers have taken notice of the the proliferation of alternative mutual funds in the retail and institutional channels and have changed their game plan accordingly.
Income annuity sales set new quarterly record, increase for fourth-consecutive quarter; fixed annuity sales drop 11 percent compared to 2011.
Interest rates are having a large impact on overall annuity sales, says Catherine Theroux, director of Public Relations at LIMRA. For fixed annuities, people are less inclined to lock in rates at this level.
In 2012, banks sold $29.6 billion in annuities, down 20% from 2011. Fixed annuities fell 33% to $11.9 billion, while variable annuities slipped 10% to $17.7 billion.
Rapidly changing U.S. demographics are ikely to render industry assumptions ineffective, Conning says. Protection gap offers potential for future growth.
After hiring 3,597 full-time agents last year, New York Life is raising the ante, with a goal of adding 3,700 reps in 2013. Among the new hires, more than half are expected to be women or individuals who represent the cultural markets, as the company put it, referring specifically to the African-American, Chinese, Hispanic, Korean, South Asian, and Vietnamese communities.
More advisors say tax deferral will become increasingly important in annuity sales. In a recent poll by the Insured Retirement Institute (IRI), 28% of advisors expect tax deferral to take on greater importance in the next five years, a notable increase from 20% of advisors expressing this opinion in 2011.
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Sales of deferred income annuities grew to more than $1 billion in 2012. But they are still a minor portion of the overall market, representing less than one percent of total annuity sales.
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The amount of money flowing into annuities declined last year more than 6% from prior-year levels, according to a report from the Depository Trust & Clearing Corp.
Consumers may be wary of life and annuity products as they confront more immediate financial concerns, according to the Deloitte Center for Financial Services.
Lincoln Financial Group has selected the FireLight platform to automate and streamline its annuity applications.
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Industry wide, however, annuity sales dropped slightly in the third quarter, according to a report by Morningstar and Beacon.
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After six months of negative cash flows, non-qualified annuities turned positive in the third quarter.
But the increase comes from the fact that more banks began reporting for the first time an apples-to-apples comparison is not so rosy.
Hartford Financial Services Group Inc. is offering to pay some clients to give up retirement products as Chief Executive Officer Liam McGee works to reduce risks tied to stock market declines and free up capital.
Consumers are increasingly going online to research insurance and annuity products, but the Internet is far from displacing insurance professionals from their roles.
Small banks had total investment revenue of $266 million for the first half, up 11% over the same time period last year: report.
Advisors report that clients request annuities more than any other unsolicited product, according to new research from Cerulli Associates.
Indexed annuities have gained popularity while variable annuities have softened, as the players on the buy and sell side change.
The increase in both market volatility and interest from the Baby Boomers in generating retirement income should be a slam-dunk for variable annuities.
TD Ameritrade announced Wednesday it will introduce access to a full range of competitively priced annuities to help independent registered investment advisors meet increasing client demand for retirement income solutions.
While annuities have become more widely accepted as a vital part of a retirement strategy, there are millions of Americans who still aren't opting for them.
While a number of major carriers have exited the annuity industry due to capital constraints, continued volatility and historically low interest rates, key players contend that there is still plenty of capacity to meet growing market demand.
Seventy-three percent of annuity owners and 17% of non-owners agreed that annuities are an important part of a retirement strategy, compared to 55% and 8%, respectively a year earlier, according to the survey of investors and financial advisors released at the IRI 2012 Annual Meeting,
"The industry has been in an interesting transformation," said Catherine J. Weatherford, president and CEO of the Insured Retirement Institute. "The financial crisis hit banks rapidly, but for the life insurance industry, it took a while for the issues from the crisis to develop."
Indexed annuity sales increased 8.3% and income annuities were up 6.1% in the second quarter, according to Beacon Research. It was the second-best quarter ever for those product types, Beacon said in a press release. Total fixed annuity sales were also up, but with a more muted 1% gain in the quarter. And they declined 17.2% from the year-ago period.
Annuity sales in the second quarter of 2012 totaled $57 billion, down 8% from the year-ago quarter, according to LIMRA.
Lifelong income solutions for defined contribution plans are on the way. With defined benefit plans waning and life expectancy waxing, more retirees will need more guaranteed income than Social Security can provide.
More than three in four advisors expect to continue selling variable annuities and allocate 11% of their assets under management toward these products, according to Cogent Research.
In the first half of 2012, tons of cash flowed out of non-qualified annuities, according to the Depository Trust & Clearing Corp.
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Seventy-five percent of variable annuity buyers, 86% of indexed annuity buyers and 86% of traditional fixed annuity buyers reported being satisfied with their annuities.
Annuity income at banks overall increased; but an apples-to-apples comparison shows a clearer picture and tells a bleaker story.
Although overall activity in the annuity market has been down over the past 13 months, inflows in May increased by slightly more than 1% to $7.5 billion from $7.4 billion in April, according to the Depository Trust & Clearing Corp.
Bank holding companies raked in $118.4 billion in wealth management income in 2011, up 1.35% from $116.9 billion in 2010. The increase comes despite a lackluster fourth quarter, the industrys weakest since the beginning of 2009.
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New York Life says its Guaranteed Future Income Annuity product has garnered more than $500 million in premiums in less than a year.
As of March 31, U.S. retirement assets totaled $18.9 trillion, up 6.3% from $17.8 trillion in the previous quarter.
The past few years of market volatility have demonstrated the importance of guaranteed income in retirement, said Alison Salka, LIMRA corporate vice president and director of retirement research,
Advisors are more committed than ever to helping clients with their retirement income planning but they still face a host of challenges.
The new annuity products, which are being offered by wealth managers in the firms Advisor Asset Program, come in response to a growing demand among investors for a more guaranteed form of tax-deferred retirement income.
Income annuity sales in the first quarter climbed almost 23% to $2.16 billion from $1.75 billion a year ago. Indexed annuities, meanwhile, increased nearly 9% hitting $8.16 billion.
Insurance companies and broker-dealers sold $7.4 billion million in annuity products in April, down from $7.7 billion in March, the Depository Trust & Clearing Corporation announced.
MetLife noted as top seller of annuities, while Prudential leads variable annuity sales; overall, annuity sales decline markedly.
Morningstar has launched Annuity Intelligence, a web-based research and evaluation tool for advisors and broker-dealers charged with finding the best variable annuity products for their clients.
Indexed annuities were one bright spot in the market, hitting $8.1 billion in sales, up 14% from the year-ago period.
Jefferson National has beefed up its Monument Advisor variable annuity with a slew of new alternative investment options.