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

Dynasty CEO teases 'Virtual Shirl' as RIA execs debate AI's workforce impact
Dynasty CEO teases 'Virtual Shirl' as RIA execs debate AI's workforce impact

At Goldman Sachs’ RIA conference, Dynasty’s Shirl Penney said an AI clone trained on his emails and speeches could be the first of “hundreds of digital employees.”

Captrust adds $1.25B Pennsylvania firm in latest push into private wealth
Captrust adds $1.25B Pennsylvania firm in latest push into private wealth

The top-ranked RIA by total AUM continues to scale its wealth management arm, bringing its Pennsylvania presence to five offices.

WallStreetBets takes on the SEC — and makes a surprisingly sharp case
WallStreetBets takes on the SEC — and makes a surprisingly sharp case

The Reddit trading community's formal comment letter against the proposal is drawing widespread attention across finance and tech circles.

Frustrated former advisor launches AI-powered CRM with $8B RIA client
Frustrated former advisor launches AI-powered CRM with $8B RIA client

Chicago Partners Wealth Advisors is helping shape the platform's product roadmap after switching from a legacy system.

Stratos Wealth Holdings closes 11 acquisitions in push for advisory scale
Stratos Wealth Holdings closes 11 acquisitions in push for advisory scale

RIA aggregator adds $4.8 billion in client assets across seven states as demand grows for alternatives to traditional succession models.

SPONSORED Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management

SPONSORED Durability over scale: What actually defines a great advisory firm

Growth may get the headlines, but in my experience, longevity is earned through structure, culture, and discipline