Protective protects itself

MAY 19, 2013
Up-and-coming variable annuity player Protective Life Insurance Co. is taking steps to stem the flow of contract premiums. In a filing last Monday with the Securities and Exchange Commission, Protective said that it no longer will accept any variable annuity payments if the money is coming from either a 1035 exchange or a retirement plan rollover. Protective will continue to take payments that aren't funded through 1035s or rollovers, the company noted in the filing.

COMPANY GETS ATTENTION

The company's profile has been raised considerably among financial advisers since the biggest VA sellers, having decided they'd had their fill of the business and its exposure to long-term liabilities and low interest rates, have pulled back. Protective's block of VA business has fared well due to recent rising markets, which is a boon for fee income, John D. Johns, president and chief executive of the insurer, noted in a first-quarter earnings call. The carrier had $797.1 million in new VA sales during the fourth quarter of 2012, compared with $853.9 million in the year-earlier period. Over the past five years, Protective has seen significant momentum in its VA business, ending 2012 with $2.73 billion in VA sales, up from $452 million in 2008. Protective has climbed the ranks among VA sellers, reaching No. 13 in the fourth quarter of last year, up from No. 16 in the fourth quarter of 2011, according to Morningstar Inc. In general, the majority of overall variable annuity sales come from 1035 exchanges, as opposed to new money. Protective has been taking steps to slow sales; the company “has been taking different price actions in derisking,” Mr. Johns noted on the first-quarter call. “We have been planning for variable annuity sales to moderate as they did on a sequential basis in the quarter,” he said on the call. “We view that as very much in line with our plan.” Protective Life spokeswoman Eva Robertson was not available to comment.

Latest News

The Stacking Strategy: How Intelligent Allocation Can Create Better Tax Outcomes
The Stacking Strategy: How Intelligent Allocation Can Create Better Tax Outcomes

What if one investment decision could create tax-saving opportunities across your entire portfolio? Chris Vizzi shares how the Stacking Strategy helps investors align tax planning, portfolio construction, and wealth preservation to maximize long-term outcomes while keeping more of what they earn.

AI could drag down RIA valuations, warns Alaris CEO Allen Darby
AI could drag down RIA valuations, warns Alaris CEO Allen Darby

Buyers spending on AI may treat less efficient sellers as overstaffed and price the cost of rightsizing into lower offers

Former Western Asset Management star bond manager fined $3 million
Former Western Asset Management star bond manager fined $3 million

Kenneth Leech pleaded guilty in June to one obstruction charge, and could face six to 12 months ⁠in ​prison.

Morningstar rolls out agentic AI platform built on its research
Morningstar rolls out agentic AI platform built on its research

Launch of Direct AI follows a model portfolio tie-up with Envestnet as advisors juggle AI adoption and private-market due diligence.

Advisor moves: Osaic draws Equitable advisor overseeing $245 million in assets
Advisor moves: Osaic draws Equitable advisor overseeing $245 million in assets

Meanwhile, Cetera's streak of Commonwealth recruitment continues in Washington, and an LPL advisor hops over to Raymond James in Maine.

SPONSORED Built on insurance experience to deliver on long-term promises

Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor