No big price increases for Lincoln National annuities

CEO Dennis Glass lays out insurer's strategy for when interest rates rise.
OCT 02, 2014
Good news is ahead for customers and advisers who use Lincoln National Corp.'s annuities: CEO Dennis Glass doesn't anticipate significant price increases for clients, and some price reductions may be coming up in the next couple of years. Mr. Glass spoke Monday about the state of the life insurance industry at the Insured Retirement Institute's annual conference in Williamsburg, Va. Topics he covered included the industry's response to plummeting interest rates following the financial crisis in 2008. Insurers at the time were unable to gain much of a return on the premiums received from customers, and they faced additional difficulties given the sensitivity to interest rates of living benefits on variable annuities. That led to a round of repricing across the board, Mr. Glass recalled, particularly on universal life insurance and variable annuity living benefits. (See also: Jackson National unveils tiered pricing for VAs) But most of those changes appear to be in the past for customers at Lincoln. “That's all behind us,” Mr. Glass said. “There are no more significant product price increases on the horizon for our customers. And as rates rise in the next couple of years, the next move will be to reduce prices.” But don't interpret an upbeat industry outlook as a prediction that carriers will go back to cut-throat competition on richer benefits at lower and lower prices. These days, a large chunk of variable annuity business market share is overseen by five insurers and Lincoln is among them. “[We're] doing the right things with products and solutions and not competing on price and benefits,” Mr. Glass said. “For the foreseeable future, we'll all be able to compete against each other smartly, if you will.” He also seemed unfazed about the concentration of the variable annuity industry in five companies, a result of some insurers leaving the market amid the economic tumult during the recession — and others stepping up to receive more volume. “What's going on today is that most of the players in the market place have been around a long time,” Mr. Glass explained. “I think the variable annuity business is in a steady competitive state and people are making good decisions on products, features, pricing, the back office and hedging.” “I don't see the [concentration] as a particularly serious threat to the industry,” he said.

Latest News

Newsom wants nationwide billionaires tax as presidential bid may loom on the horizon
Newsom wants nationwide billionaires tax as presidential bid may loom on the horizon

“It’s time for an economic reset,” wrote the California governor, in a post on X.

Maryland regulators spank fledgling art-focused RIA Masterworks over registration snafus
Maryland regulators spank fledgling art-focused RIA Masterworks over registration snafus

Masterworks was launched in 2017 but its RIA, Masterworks Advisers, is just three years old.

Investors allege Miami operator took over $1.5 million in EB-5 scheme
Investors allege Miami operator took over $1.5 million in EB-5 scheme

One 2017 form, no broker license, and a $42 million gap they say surfaced on a webinar.

Gen X, millennials lag in retirement confidence amid knowledge gap
Gen X, millennials lag in retirement confidence amid knowledge gap

Fewer than half of Americans in their peak earning years feel on track for retirement, while many say limited financial knowledge and access to professional guidance are holding them back.

Advisor moves: Veteran-led UBS team overseeing $460 million migrates to Merrill
Advisor moves: Veteran-led UBS team overseeing $460 million migrates to Merrill

Meanwhile, Wells Fargo hauled advisors overseeing $825 million in the West Coast, while Wedbush has welcomed a seasoned professional from Stifel in California.

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income

SPONSORED Why direct indexing stopped being optional

Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.