A unit of American International Groups is poised to achieve the greatest growth among variable annuity providers outside the dominating top five carriers, according to a new survey.
Cerulli Associates, Boston, published this finding in a new survey, “Annuities and Insurance 2012: Evaluating Growth Capacity Flows and Product Trends.” The report includes chapters covering industry capacity, evolution of the variable annuity product and sub-advisory landscape, integrated distribution, annuity distribution and product strategies, as well as variable annuity, fixed/fixed indexed and life insurance products.
The survey finds that SunAmerica Financial Group, a unit of New York-based AIG, increased variable annuity sales to $2.3 billion for the second quarter of 2012, resulting in annual sales of $4.5 billion. This figure represents a 21% increase over the same time period in 2011.
Cerulli also identifies Jefferson National Life Insurance Co., Louisville, Ky., as the “the most successful and innovative, fee-based VA carrier.” The report notes that Jefferson National offers not only a low cost product, but has also demonstrated “best-in-class strategies of eliminating fees, appreciating how [registered investment advisors] operate their business, and delivering an impressive technology platform that can be integrated into existing systems.”
The survey flags “simplified annuities” as the greatest sales opportunity for asset managers. The new VA products, the report notes, don’t offer living benefit guarantees, such as a guaranteed minimum income or withdrawal benefit riders. Emblematic of the new products, rather, is Jackson National’s Elite Access product, which provides asset diversification with less correlated alternative investment strategies, tactical responses to market volatility and trends, and daily reactive risk management.
The report pegs Security Benefit, Topeka, Kan., as “the most remarkable” provider of fixed indexed annuities and market-share gainer in the second quarter of 2012. Underpinning the company’s success, Cerulli notes, is Security Benefit’s acquisition of Guggenheim Partners, which in turn had quarter Equi Trust and Canadian fixed annuity provider Industrial Alliance during the year past.
In the second quarter of 2012, Security Benefit’s Secure Income product became the leading fixed income annuity, capturing $645 million in sales, the report states.