Guggenheim scoops up insurer to build fixed indexed annuities

Gives firm 10th-place market share, wider distribution

Oct 7, 2011 @ 3:11 pm

By Darla Mercado

+ Zoom

Guggenheim Partners LLC has bought EquiTrust Life Insurance Co., ramping up its presence in the fixed-indexed-annuity realm.

The deal was announced in a filing with the Securities and Exchange Commission today. Guggenheim bought the insurer from FBL Financial Group Inc. for a preliminary purchase price of $440 million in cash. The firm expects the transaction to close around Dec. 30.

Guggenheim will be stepping up its profile in the fixed-indexed-annuity market through the purchase. It currently owns Security Benefit Life Insurance Co., which sits at 12th place among indexed-annuity sellers, according to AnnuitySpecs.com's Indexed Sales & Market Report for the second quarter of this year.

Meanwhile, EquiTrust sits at 15th place, and a combination of the two will give Guggenheim about a 4.16% share of the indexed-annuity marketplace, equal to being the No. 10 player in the industry.

The new arrangement will give Guggenheim a wider breadth of distribution partners overall.

Security Benefit currently offers an exclusive indexed annuity via an arrangement with field marketing organization Advisors Excel and is a fairly new entrant to that product marketplace. Meanwhile, EquiTrust has been around since 1997 and has a variety of other field marketing organizations that sell its indexed annuities, said Sheryl Moore, president of AnnuitySpecs.

Other indexed-annuity experts noted that from a distribution point of view, EquiTrust's business might be more compatible within Guggenheim's structure compared with where it had fit with FBL, which also sells property/casualty insurance and life coverage.

“FBL's customer base is made of people in the rural markets; it's a very stable product line,” said Judith Alexander, director of sales and marketing at Beacon. “In the independent-agent channel, things are far more competitive. It might have been a better fit with Guggenheim.”

"We're narrowing our focus for FBL more on the Farm Bureau niche," said Nancy Doll, spokeswoman for FBL. The Farm Bureau niche largely offers life insurance products through a career agent force, while EquiTrust had sold its products through independent agents.

Guggenheim spokeman Jeffrey Kelley did not immediately return a call for.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

Pershing's Crowley: The case for business transformation

Your practice is changing rapidly. What worked five years ago might not work for the next five years. Pershing's Jim Crowley has some solutions as your business evolves.

Video Spotlight

Will It Last As Long As Your Clients Do?

Sponsored by Prudential

Video Spotlight

The Catalyst

Sponsored by Pershing

Latest news & opinion

Brian Block's $4 million bonus was tied to a key metric at ARCP

Prosecution rests case in fraud trial against CFO of American Realty Capital Properties.

Edward Jones is winning the Google search war

Brokerage firm's digital marketing investment helps land it at the top of local and overall search engine results, report finds.

Voya's win in 401(k) fee suit involving Financial Engines bodes well for other record keepers

Fidelity, Aon Hewitt and Xerox HR Solutions are currently defending against similar fiduciary-breach claims.

Collective investment trusts getting more attention from 401(k) advisers

The funds are catching on due largely to lower costs and more product availability, but come with some inherent drawbacks.

Vanguard rides robo-advice wave to $65B in assets

Personal Advisor Services, four times the size of its closest competitor, combines digital and human touch.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print