New Annuities Hit A Market Moving In Two Directions
May 12, 2015 by Cyril Tuohy, cyril.tuohy@innfeedback.com
Two big players in the U.S. annuity market, Allianz Life and Voya Financial, have announced annuity product launches into a marketplace that is moving in two opposite directions at once.
Allianz has introduced new investment options for the company’s Vision Variable Annuity and Connections Variable Annuity product lines. These choices are available to new business and contracts already in-force, the company said.
Robert DeChellis, president of Allianz Life Financial Services, said more investment options offer value to contract holders by giving them more choices. “Adding these new investment options also enhances our robust variable annuity fund line-up by giving our clients greater choice,” he said in a news release.
Allianz, in a news release, said one of the new investment options is the AZL MVP DFA Multi-Strategy Fund and the other option is the RCM Dynamic Multi-Asset Plus VIT Portfolio.
The investment choices are available on contracts that either have no additional optional benefits or have the optional income protector rider, the company said.
Allianz was the No. 1 seller of fixed annuities in the U.S. last year with sales of $12.7 billion, and recorded $2.1 billion worth of individual variable annuity sales, according to a survey by LIMRA Secure Retirement Institute (LIMRA SRI).
In a separate announcement, Voya announced the expansion of its fixed index annuity offerings. The new product, Wealth Builder Plus Annuity, allows investors to grow assets “linked to certain indexes,” specifically the Standard & Poor’s 500 index, the company said.
Carolyn Johnson, president of Annuities and Tax Exempt Markets for Retirement Solutions at Voya, said in a news release that Americans are “approaching retirement without a sound strategy for their income needs.”
Fixed index products limit downside risk and gains are locked in every year through four index crediting strategies, Voya also said.
A May 1 filing also announced the launch of the Voya PotentialPLUS Annuity, which the company describes as a “flexible premium deferred combination variable, index and fixed annuity contract.”
Voya reported sales of $1.5 billion in fixed indexed annuities last year, an increase of 3.2 percent over the previous year, according to Wink’s Sales & Market Report.
The annuity marketplace last year appeared to undergo what experts call “bifurcation,” in which sales of one class of annuity moved in the opposite direction of sales of a sister class of annuity.
LIMRA SRI estimated sales of individual variable annuities at $140.1 billion last year, a drop of 4 percent from 2013. LIMRA SRI also reported sales of individual fixed annuities shot up to $95.7 billion in 2014, an increase of 13 percent over the previous year.
Index annuities, one of eight fixed annuity categories tracked by LIMRA, led the pack as sales of fixed index products hit $48.2 billion last year, an increase of 23 percent over 2013.
Separate sales data of fixed index annuities tracked by Wink show index annuity sales at $46.8 billion last year, an increase of 21.3 percent.
Despite overall growth in annuity sales last year, the number of annuity product filings has dropped since the fourth quarter of last year as interest rates remain low, according to one analyst.
