P-E-owned fixed-annuity player makes inroads

Dec 9, 2012 @ 12:01 am

By Darla Mercado

Security Benefit Life Insurance Co. helped push indexed-annuity sales to record levels in the third quarter, illustrating that offerings from private-equity-owned firms are no flash in the pan.

The Guggenheim Partners LLC-backed insurer appeared on the list of the top five overall fixed-annuity players, with $1.03 billion in total sales in the third quarter, according to data from Beacon Research Publications Inc.

No. 1 for the period was Allianz Life Insurance Co. of North America with $1.31 billion, followed by Aviva USA with $1.064 billion, New York Life Insurance Co. with $1.06 billion and Security Benefit. American Equity Investment Life Holding Co. rounded out the top five with $982 million.

Overall, fixed-annuity results dropped 13% from a year earlier to $26.6 billion.

However, indexed annuities and income annuities picked up the slack, with $8.7 billion sold during the third quarter, up 0.5% from a year earlier. Income annuities, meanwhile, accounted for $2.4 billion in sales, boosted largely by sales of deferred-income annuities.

RECORD SALES

Both product lines are pulling record level sales year-to-date, with indexed climbing 4.5% to $25.7 billion and income annuities rising 9% to $6.8 billion.

Judith Alexander, director of sales and marketing at Beacon, noted that without Security Benefit Life's growth, year-to-date indexed-annuity results would have declined from last year's levels but instead were up by about $1.1 billion.

“Security Benefit is primarily offering competitive guaranteed- lifetime-withdrawal benefits,” she said.

There are benefits to being an insurer owned by private equity in this product line, Ms. Alexander said.

“Private-equity-owned companies have the advantage of being private. They are responsible to their investors, but they can afford to operate with less of a quarter-to-quarter focus than the stock companies,” Ms. Alexander said.

“Many also have larger investment operations than most of the longtime players in the fixed-annuity market,” she said.

dmercado@investmentnews.com Twitter: @darla_mercado

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

Inside the financial adviser of the future

What does the financial advisory firm of the future look like? We spoke to some of the best and brightest young minds in the financial services industry at our inaugural Future of Our Business think tank to see what they think.

Latest news & opinion

Big gains attract new money to emerging markets, but should investors stay?

An estimated $6.7 billion has flowed into emerging-market stock funds and ETFs so far this year, according to Morningstar.

Attorney blasts Finra after regulator loses insider trading case

Lawyer says it was 'slimy' of Finra to publicize the case while it was still being litigated.

Will Jeffrey Gundlach's Trump-like approach on Twitter work in financial services?

The DoubleLine CEO's attacks on Wall Street Journal reporters is igniting a discussion on what's fair game on social media.

Fidelity wins arb case against wine mogul but earns a rebuke from Finra

In the case of investor Peter Deutsch, Fidelity doesn't have to pay any compensation, but regulator said firm put its interests ahead of his.

Plaintiffs win in Tibble vs. Edison 401(k) fee case

After a decade of activity around the lawsuit, including a hearing before the U.S. Supreme Court, judge rules a prudent fiduciary would have invested in institutional shares.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print