ING cementing broker-dealer relationships amid push for new fixed indexed annuity feature
July 20, 2011 by Darla Mercado
Shopping fixed indexed annuities to B-Ds, insurer faced
questions on retreat from VA business
By Darla Mercado
July 20, 2011
ING is making another go at the independent broker-dealer market, this time
with a new fixed indexed annuity feature scheduled for an August release.
The new feature would use the three-month Libor rate as a way to credit
interest to the insurer’s Secure Index Five, Seven and Opportunities Plus fixed
indexed annuities. At present, the product offers a fixed rate strategy, which
credits interest at a rate declared by ING, along with index-linked strategies.
“Consumers may not want to lock the fixed rate now, but what if we tracked
the three-month Libor?” asked Chad Tope, president of ING Annuity and Asset
Sales. If the Libor — the interest rate at which banks lend to each other —
rose, so would the interest credited to the annuity, he noted.
The new feature will target independent broker-dealers, with which ING has
kept ties following its exit last year from the variable annuity business.
ING shut down its VA wholesaling unit, but continued distributing five- and
seven-year fixed indexed annuities through broker-dealers, using a system of 25
internal wholesalers and 50 national marketing organizations, Mr. Tope said.
Five individuals working at the marketing organizations handle the insurer’s
external relationships.
Broker-dealers had pelted the insurer’s fixed indexed annuity wholesalers
with questions following ING’s departure from the VA business. “We had to answer
questions along the lines of why we exited the market,” Mr. Tope said. “But it
was easier than expected to continue our relationships with the broker-dealers.”
Though the new feature and stepped-up outreach to broker-dealers signals the
next stage for ING as a fixed indexed annuity carrier, the insurer doesn’t
necessarily want to aim for the very top of the list.
Currently, Allianz Life Insurance Co. of North America, American Equity
Investment Life Holding Co. and Aviva USA are the top three fixed indexed
annuity sellers. ING was at fifth place for the first quarter, according to
AnnuitySpecs.com.
“We’re very happy with our marketplace position,” Mr. Tope said.
