Jackson National’s VA sales will be dialed back by parent

Jackson National Life Insurance Co.’s surging variable annuity sales will be curtailed by its parent, Britain’s Prudential PLC, over concern that the product’s success might be too much of a good thing.
Rising consumer demand for the product, along with increased preference among distributors, have led to skyrocketing VA sales.
VA sales have been a big part of the reason Jackson’s separate account assets have ballooned to $50 billion from about $20 billion at the beginning of 2009, according to Tidjane Thiam, chief executive of Prudential PLC.
“Given the strength of our competitive position in the U.S. now, we are able to take various product initiatives to continue to optimize the balance between growth, capital, capital consumption, capital generation and profitability,” he said in an earnings phone call today.
Those product initiatives, which will affect products with shorter surrender charge periods and could involve the investment options available to clients, are expected to kick in by the end of the year, Mr. Thiam said.
The growth of Jackson’s U.S. variable annuity business had surprised Prudential PLC, Mr. Thiam said. “We have been continuously surprised by the market,” he said. “We sincerely expected the competition to come back much earlier and we expected to see volume and/or margins start to drift down earlier.” Distributors have played a role in that, as they did not allow competitors to regain their shelf space, he added.