Life and Annuity Issuers Tell Wall Street About Interest Rate Winter
November 6, 2019 by Allison Bell
Insurance company executives say the current interest rate ice storm is hurting life and annuity sales.
Executives from American International Group Inc., Lincoln Financial, American Financial Group Inc. and FBL Financial Group Inc. have been talking about life insurance premium increases and annuity crediting rate cuts during conference calls with securities analysts.
AIG executives, for example, told the analysts that AIG is still profitable, that they think their long-range economic assumptions are still valid, and that they’re happy with the company’s pricing strategy.
Kevin Hogan, AIG’s life and retirement chief executive officer, said lower interest rates are great for many types of investment income.
Sales of indexed annuities were strong in the third quarter, but “we expect lower levels of sales for certain products in the fourth quarter due to lower interest rates and the uncertain environment,” Hogan said. “We expect lower sales of fixed annuities in the prevailing interest rate environment.”
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