Record Indexed Annuity Sales Top Previous Record by 5%

September 17, 2013 by Annuity Outlook

 

Originally Posted at Annuity Outlook Magazine on September 16, 2013 by Annuity Outlook.

 

Wink, Inc. Releases Second Quarter, 2013 Indexed Sales Results

 

Pleasant Hill, Iowa. September 16, 2013– Forty-two indexed annuity carriers participated in the 64^th edition of Wink’s Sales & Market Report, representing 99.8% of indexed annuity production.

Total second quarter sales were $9.2 billion. In reviewing second quarter indexed annuity sales, production was up more than 17.0% when compared to the previous quarter, and up more than 5.5% when compared with the same period last year. “This was a record-setting quarter for indexed annuity sales, beating the previous third quarter 2010 record by nearly 5.0%!” exclaimed Sheryl J. Moore, President and CEO of both Moore Market Intelligence and Wink, Inc. She added, “Even year-to-date sales increased 1.5% over this same period, last year. What a great position for these products to be back on the uptick!”

Facts worth noting this quarter are that Allianz Life maintained their position as the #1 carrier in indexed annuities with a 13.62% market share. Security Benefit Life and American Equity also maintained their position as the second and third-ranked companies in the market;  Great American, and EquiTrust rounded-out the top five, respectively. Security Benefit Life’s Total Value Annuity was the #1 selling indexed annuity for the fourth consecutive quarter.

Guaranteed Lifetime Withdrawal Benefit (GLWB) utilization rebounded in the second quarter, while additional experience data pointed to trends in rider elections and income commencement. Moore pointed-out, “This quarter marked a record for GLWB elections, with 67.3% of all indexed annuities sales opting to purchase the benefit (when available). The vast utilization of these benefits, and their income commencement, continue to show varied results that provide further insight into our nation’s needs for guaranteed lifetime income- remarkable!”

For indexed life sales, 48 insurance carriers participated in Wink’s Sales & Market Report, representing over 95.2% of production. Second quarter sales were $336.7 million. When evaluating second quarter indexed life sales, results were up more than 1.0% when compared with the previous quarter, and up more than 12.0% as compared to the same period last year. Ms. Moore remarked, “We had yet another impressive quarter for indexed life sales. Plus, year-to-date sales of indexed life also skyrocketed nearly 20.0%! She went on to comment, “Last quarter, I anticipated that sales of IUL would increase exponentially once new companies’ distributions were comfortable with their product. It is nice to see that now our most recent entrants in the IUL market have gotten their ‘toes wet,’ that their efforts are translating into to sales.”

Items of interest in the indexed life market this quarter included Pacific Life Companies taking over the #1 position in indexed life sales, with a 13.73% market share. AXA Equitable moved-up to become the second-ranked company in the market, while National Life Group (LSW), Aegon, and Minnesota Life rounded-out the top five companies, respectively. AXA Equitable’s Athena Indexed UL was the #1 selling indexed life insurance product for the ninth consecutive quarter. The average indexed UL target premium reported for the quarter was $5,770, a decline of nearly 50% from the prior quarter.




For more information go to www.LookToWink.com
The staff of Moore Market Intelligence has combined experience of nearly three decades working with indexed insurance products. The firm provides services in speaking, research, training, product development, and marketing of indexed annuities and indexed life insurance. Their knowledge in product filing research and policy forms analysis, coupled with their unmatched resources in insurance distribution, give them the expertise to provide competitive intelligence that allows carriers to stay ahead of their competition.

Sheryl J. Moore is president and CEO of this specialized third-party market research firm and the guiding force behind the industry’s most comprehensive indexed life and indexed annuity due diligence tools, AnnuitySpecs. and LifeSpecs. Ms. Moore previously worked as market research analyst for top carriers in the indexed life and annuity industries. Her views on the direction on the indexed market are frequently heard in seminars and quoted by industry trade journals.

Ms. Moore is the author of the quarterly Wink’s Sales & Market Report. Serving as the insurance industry’s #1 resource of indexed insurance product sales since 1997, this report provides sales by product, company, crediting method, index, distribution, surrender charge period, and more. The report is formerly known as AnnuitySpecs.com’s Indexed Sales & Market Report, which has been rebranded under the company name Wink, Inc. Wink, Inc. will be the company name that distributes resources such as this sales report, AnnuitySpecs.com, and LifeSpecs.com.

Wink, Inc. is the company that distributes resources such as this sales report, along with the competitive intelligence tools AnnuitySpecs and LifeSpecs. Wink has the same ownership, same people, great service, and unparalleled competitive intelligence, all rebranded under one name, one new dynamic website at www.LookToWink.com.

Annuities: Then and now

By Richard Dobson, Jr.

July 30, 2013             

 

The history of annuities is one of growth and innovation. The original concept evolved from A.D. 222 when Roman scholar Ulpianis was credited with developing the first actuarial table. This progressed into individuals making large payments into an annua, (Latin for annual stipend) to receive annual payments till death or for a specified period.

Roman soldiers were paid an annua to compensate for their service. From then on, into the Middle Ages, society continued to use pools of cash to pay individuals dividends or stipends until death, with the proceeds of these programs paying for wars or public works.

In 1720, the Presbyterian Church in the Americas started providing annuities to its aging ministers and families, likely the first annuities issued in North America.

Today, we see annuities being used frequently for a variety of reasons. Certain annuity products and their complexities present unique challenges to advisors in this day and age, but they also present numerous opportunities to make solutions for the right type of client.

A few of the benefits annuities can provide include safety of principal, opportunity for growth of funds invested with the insurance company, diversification, guaranteed lifetime income and significant income tax advantages. One key additional benefit in variable annuities is the ability to exchange sub-accounts with no current income tax consequences and at low or no cost.

Today’s annuities come from a long road of transformation. I will help shine a light on their evolution and identify some of the advantages that have successfully been used by our firm for more than 35 years to solve specific client goals and objectives.

Annuities past
In 1653 France, under Louis XIV, an Italian banker named Lorenzo DeTonti implemented an investment plan for raising capital, likely borrowed from ancient Rome. The plan involved a lump sum paid by the participant, who would then receive income each year. As participants died, the income to those remaining increased. Then, the last survivors would receive the highest benefit — an early version of mortality credits. Called a “tontine,” this set-up signaled the birth of annuities.

In 1913, the 16th Amendment to the United States Constitution allowed Congress to levy taxes on income. The exclusion that was made for life insurance and annuity products was secured through efforts from the National Association of Life Underwriters (now known as NAIFA). These benefits still stand today, although amended much over the years. The basic premise is that you can accumulate dollars inside of life insurance and annuity products with income tax deferral until the cash is withdrawn for use or paid out as a life insurance death benefit. Some accumulations are distributed tax free.

In the 1950s, U.S. life insurance companies started issuing deferred and immediate annuities. They typically were for large cases and had many fees and charges. In 1963, a company in Philadelphia called the First Investment Annuity Company (FIAC) issued a deferred variable annuity. This “investment annuity” provided tax deferral to any investment that was placed in it. For example, a certificate of deposit, mutual fund or shares of stock could benefit from tax deferral when “wrapped” by the annuity, even if the owner had purchased those accounts or shares years prior. The investment annuity was an immediate hit with advisors across the country, because they saw the advantages of tax deferral for depositors and clients.

The IRS consistently issued more than 70 public and private rulings from 1963 through 1977 that this investment annuity was acceptable within the tax code. However, it wasn’t long before the lack of tax revenue due to this plan’s existence caught the attention of Congress. In 1977, the IRS issued Rev. Rul. 77-85, which was made public law when the Senate passed HR 3477. This immediately closed down investment annuity products. However, through a grandfathering provision, clients had funds in these plans for decades.