Sales of Annuities Tied to Strategies Fall in Quarter
December 3, 2015 by BEN EISEN, BLOOMBERG BRIEF
BY BEN EISEN, BLOOMBERG BRIEF
Sales of annuities tied to formula-driven proprietary indexes and other specialized strategies declined during the third quarter as two sellers pulled back.
Insurers sold about $3 billion of the products, according to data from Wink’s Sales & Market Report for the three months through September, released Nov. 25. That’s down from $3.2 billion a year earlier. The annuities typically link to strategies that seek to cap volatility, sometimes by rotating between indexes.
Volume declined even as sales grew 21 percent to $13.9 billion for all indexed annuities. This broader category includes products tied to common benchmarks such as the Standard & Poor’s 500 Index, which accounts for more than half the volume.
The use of specialized gauges shrank mainly because sales dropped at two companies, according to Sheryl Moore, chief executive officer of Moore Market Intelligence and author of the report.
Allianz SE, which sells an annuity tied to the Barclays U.S. Dynamic Balance Index, and Security Benefit Life Insurance Corp., which distributes products linked to Royal Bank of Scotland Plc’s Annuity Linked TVI Index, both saw declines. Across all indexed annuities, Allianz sales fell 34 percent from a year earlier to $2.04 billion and Security Benefit Life’s fell 69 percent to $288.4 million, the report showed.
Allianz sales dropped because the insurer lowered the minimum guaranteed payout on its products tied to the index, according to Matt Gray, vice president of product innovation at Allianz Life Insurance Co. of North America. “It’s a continued trend that we’ve seen and expected,” he said.
Peter MacKellar, a spokesman for Security Benefit Life with Communications Strategy Group, declined to comment.
