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Statutory capital growth among life insurers in 2013 will be moderate given the expectation of modest operating earnings growth due to the ongoing effects of low interest rates, according to a new report from Fitch Ratings that reviews statutory trends for U.S. life insurers for 2012 and implications for 2013.

U.S. life insurers reported strong growth in statutory capital and net income in 2012, which will lead to improved statutory dividend capacity in 2013 for parent company debt service and other funding needs, a Fitch release said.

Statutory net income for the Fitch universe of life insurers increased to $34 billion in 2012 compared to $9 billion in 2011, the highest level in five years. The majority of the 2012 net income change came from large variable annuity companies who reported lower reserves on guarantee benefits, which more than offset the negative impact associated with low interest rates. Fitch notes that reporting of hedge-related derivatives performance as a non-operating item can significantly affect the reported levels of net income.

Statutory capital improved 10% in 2012 for the Fitch universe of life insurers, largely driven by retained statutory earnings. As a result, Fitch estimates that the aggregate NAIC risk-based capital improved to 486% at year-end 2012 compared to 465% for 2011. Fitch believes that many insurers will be careful to maintain their RBC levels through 2013 to mitigate perceived risks in the capital markets and low interest rate environment.

Results in 2012 continued to benefit from modest realized investment gains. Overall investment losses are expected to remain low and within Fitch’s expectation of losses over the next 18 months. The source of realized capital losses/impairments appears to be returning to the more traditional sectors of corporate bonds, although structured bonds continue to contribute more than their long-term historic norm largely driven by commercial mortgage-backed securities.

Fitch does not expect a significant improvement in portfolio credit quality or liquidity in 2013 due to the pressure for investment income. Insurers will continue to move more of their portfolios to bonds rated ‘BBB’, discounted structured securities, commercial mortgages loans or limited partnership investments.

© 2013 RIJ Publishing LLC. All rights reserved.

A “perfect storm of shifting variables” is pushing insurers to change the way it does business, according to a survey of 300 insurance leaders by State Street Corporation and The Economist Intelligence Unit that is to be released next month.

The study, “Facing the Future: Blueprint for Growth,” highlights three main insurer challenges: risk, regulation and the restructuring of product offerings. Among the findings:

• 80% of respondents say they are actively considering increasing their allocation to alternative strategies to increase yield, which may add additional, more unfamiliar risk.
• More than 80% of insurers feel represents a challenge. Only 17% view the regulatory environment as not a challenge.
• 93% see restructuring product offerings to bring new, innovative products to market quickly as a challenge.
• 82% of insurance leaders say that effectively allocating capital to the most business critical priorities presents a challenge for them today. Seeking additional capital, however, is creating additional risk for insurance companies that they may not be able to handle.
• 49% are prioritizing allocations to alternative strategies for action within the next 12 months.
• 79% of insurers report that investing in more complex asset classes is a challenge for their firm.
• 55% say that they are looking at re-pricing new business to adapt to market conditions, including low interest rates, within the next 12 months.
• 82% are concerned about their ability to expand into the Asia-Pacific region successfully but 18% see no difficulty related to expansion.
• 42% say that insurers’ profitability will increase over the next five years.

“Ultra low interest rates [are] putting pressure on margins and evolving regulation is having a fundamental impact on operating models,” said Joe Antonellis, vice chairman of State Street, in a release. “Many insurance companies are left with operational roadblocks and dependencies — partly as a legacy of… mergers and acquisitions.”

© 2013 RIJ Publishing LLC. All rights reserved.

Lincoln Financial Group today introduced several new investment options for its variable annuity product lines. The new options expand Lincoln’s investment choices for advisors who prefer to work with clients in constructing a customized portfolio.

The new investment options, which seek to reduce exposure to market risks, include seven new options for Lincoln ChoicePlus Assurance products and four new options for American Legacy products.

The new options for ChoicePlus Assurance invest in underlying funds that are managed by BlackRock, Dimensional, Fidelity, MFS and SSgA. 

The new American Legacy funds now allow advisors and their clients to build their own portfolios with Lincoln’s primary living benefit riders. These selections can be combined with a fixed income option, in accordance with Lincoln’s investment guidelines, to create a diversified portfolio.

The ChoicePlus Assurance and American Legacy risk-managed fund lineups are made up of asset allocation options, as well as individual asset class options, including large, mid and small-cap funds, as well as domestic and international market exposure.

The new funds are available to Lincoln’s national network of distribution partners.

© 2013 RIJ Publishing LLC. All rights reserved.

Are “multi-asset income” funds the more-effective successor to “equity income” funds? Or are they an old concept dressed in new clothes, a marketing gimmick aimed at yield-starved, risk-averse investors?

In Europe, established multi-asset income funds enjoyed record inflows in calendar 2012, according to the May issue of The Cerulli Edge-European Monthly Product Trends. Miton, Schroders, BlackRock, Old Mutual, and Deutsche Bank all launched multi-asset income funds in the past year.

“As talk of a gravy train gains currency, however, now is a good time to consider what lies beneath the multi-asset income label,” said Barbara Wall, a director at Cerulli Associates, in a release. “Multi-asset income funds are not easily categorized but a key selection criterion for advisors and end users is the number and range of assets that funds have exposure to. A multi-asset income fund that restricts exposure to equities, cash, and bonds does not cut the mustard.” 

“If this strategy is to gather momentum and knock equity income off its perch, managers will need to diversify more, delve into specialist areas, and take risks,” said Yoon Ng, a Cerulli associate director. “A snappy fund label will spark interest but a sustainable high yield and a commitment to capital preservation will keep that interest alive.”

Other Cerulli findings:

• As part of its growth strategy, La Francaise Asset Management has decided to launch a new incubation vehicle for distributors following a successful year for international fund sales (which represented 31% of the group’s total inflows
  in 2012). The manager also plans to launch a new distribution platform in France, CD Partenaires, with an asset pool of €2.1 billion (US$2.7 billion). Meanwhile boutique Mandarine Gestion, in an effort to grow its business domestically and internationally, will be split into two specialist units: asset allocation and stock-picking. 
• Italian investors appear to be increasingly adventurous: asset allocation, dynamic mixed assets, global high-yield bonds, emerging market, and euro corporate high-yield bonds were the top five best-selling sectors in the market during the first quarter, gathering net inflows of €5.8 billion. Franklin Templeton funds attracted €1 billion of NNF from retail and institutional investors in March, topping the month’s sales chart.
• Following in PIMCO’s footsteps, more U.S. managers are approaching the European market by launching European versions of successful funds in their home markets. Lately, Matthews Asia has rolled out a UCITS version of its Asia Small Companies funds, while Polen Capital Management is targeting U.K., Swiss, and Scandinavian investors by launching a UCITS version of its U.S. growth fund.

© 2013 RIJ Publishing LLC. All rights reserved.

Prudential Financial’s newly released 2013-2014 African American Financial Experience study shows that many African Americans are experiencing financial pain. The results of the study suggest the old expression, “can’t win for losing,” describes the predicament of many in the black community.   

African Americans are significantly more likely to have debt (94%) than the general popula­tion (82%). Credit card debt, student loan debt, and personal loans are all significantly higher in the African American community. College-educated African Americans report student loan debt at a ratio of nearly 2:1 compared with all college-educated Americans.

If the Social Security claiming age were raised, African Americans would be disproportionately hurt, the findings suggest. The average retirement age for African Americans is 56, or three years lower than the U.S. average.

Averages can be misleading, of course, and they undoubtedly obscure the successes of many black Americans. “Approximately 4 in 10 households surveyed have annual incomes of at least $75,000, and nearly a quarter earn $100,000 or more. Half of African Americans surveyed said they feel better off financially than a year ago, while only 19% say they feel worse,” said Charles Lowrey, Prudential’s chief operating officer, U.S. businesses.

Defensive, not aggressive

The African-American financial stance is more defensive than aggressive, the study showed. The U.S. economy has disproportionately enriched owners of stocks, bonds and mutual funds over the past 30 years, while reducing opportunities for blue-collar workers, but relatively few African Americans own IRAs, mutual funds, stocks or bonds, according to the study.

The study indicated that the African American financial experience is largely defined by

• Family-oriented priorities and goals
• Greater ownership of protection-oriented financial products
• Greater reliance on faith-based organizations for financial education
• Financial decisions driven by women
• Earlier retirement

Across all levels of affluence, African Americans are 13% less likely than the general population to have been contacted by a financial advisor. Half of African Americans surveyed say an advisor could improve their financial decisions, only 19% say they have a financial advisor.

 “While the general population’s financial confidence is driven largely by level of asset accumulation and macroeconomic factors, African Americans’ financial confidence is shaped by a broader and balanced array of factors, including life insurance protection, level of debt and expenses, and health care costs,” Prudential said. The study also found that:

• African Americans own insurance products, such as life and disability, at equal or greater rates compared to the general population, but are about half as likely as the general population to own investment products, such as IRAs, mutual funds, stocks and bonds.
• African Americans’ priorities are “adequately protecting loved ones, leaving an inheritance and funding education,” said Sharon Taylor, senior vice president and head of human resources at Prudential.
• African Americans are more likely to live in multi-generational and female-headed households, and to be financially responsible for supporting other family members. Of those surveyed, 57% provide financial support to another family member. African Americans are twice as likely as the general population to be providing financial support to unemployed friends and family.
• Student loan debt also was reported as a significant obstacle to wealth building for African Americans. College-educated African Americans are twice as likely to have student loan debt.
• While nearly half of African Americans say they have a 401(k) or other workplace retirement plan, and 8 in 10 of those currently eligible are contributing, African Americans’ balances within employer plans are less than half those of the general population’s, in part due to loans and withdrawals. Three in 10 have taken loans from their plan, citing the need to repay other debt.

The study is based on a March 2013 poll of 1,153 Americans who identify as African American or Black and 471 general population Americans on a broad range of financial topics. Respondents are age 25-70, with a household income of $25,000 or more and some involvement in household financial decisions.

Among those meeting the survey criterion of $25,000 or more in household income, the median household income was $61,000. The overall margin of sampling error is +/- 5% for African Americans and +/- 6% for the general population.

The 2013-14 African American Financial Experience is Prudential’s second assessment of financial trends and attitudes in the African American community. As in the inaugural survey, only about a quarter of African Americans feel any financial services company has effectively shown support to the community.

© 2013 RIJ Publishing LLC. All rights reserved.

The likelihood of “black swan” events and our ability to foresee them or not has been a focus of debate among academics since the financial crisis. It’s not clear if hedge fund managers or other market mischief-makers pay much attention to what academics say, but maybe they should.

At two conferences this spring, one at the Wharton School’s Pension Research Council and the other at a Society of Actuaries gathering in Toronto, two specialists in risk-assessment weighed in with their thoughts on the matter. Their presentations were among the most entertaining at their respective conferences.

Guntham Werther, Ph.D., professor of strategic management at Temple University’s Fox School of Business, told actuaries that forecasters who missed the approach of the financial crisis just weren’t very good forecasters. They were blinkered by overspecialization and a fixation on inadequate models. 

“Just because an event was broadly missed, that doesn’t make it unpredictable,” Werther said. “In many cases, someone, or many people, foresaw it and were ignored.” That was the case in the 2008 financial crisis, where many writers pointed to the dangerous over-expansion of leveraged lending years before the actual crash.

Werther quoted former Secretary of Defense Donald Rumsfeld’s famous remark about “known knowns, known unknowns, and unknown unknowns.” But he added that there are also what Irish commentator Fintan O’Toole less famously called “unknown knowns”—information that was available at the time but that an analyst or an economic  model simply missed, for a variety of reasons.

Overspecialized education is one of Werther’s bogeymen. Many of history’s best prognosticators have been people who, however well-trained in a specific field, also have a knowledge of comparative history, philosophy, religion, psychology, as well as different legal, political and economic systems. He came close to advocating a revival of  liberal education, at least at the undergraduate level. 

Dicey

At the Pension Research Council’s annual gathering in Philadelphia, Tim Hodgson, senior investment consultant and head of the Thinking Ahead Group at TowersWatson, explained that our tendency to focus on averages blinds us to the risk of rare but catastrophic events.

More intriguingly, he suggested our analytic tools make a faulty implicit assumption about the nature of time and the existence of parallel universes. They assume that “we have infinite lives all running in parallel,” rather than a single life, he wrote in a paper submitted to the conference.  

Hodgson, whose Thinking Ahead Group has published annual rankings of systemic threats to civilization, explained that we often, and foolishly, rely on averages of alternate outcomes in order to evaluate a decision—as though we could experience all of those outcomes and arrive at a net gain or loss.

He gave the example of rolling a die six times: If you roll numbers one through five, you win an amount equal to 50% of your wealth. If you roll a six, you lose all your wealth. The average of these outcomes—the “expected return”—is a 25% gain, he said, which suggests that you should roll the die.   

But that average masks the fact that you have a one-in-six (16.7%) risk of losing everything you have. Which explains why most people instinctively shy away from an offer like that, Hodgson says. He also points out that catastrophic, irrecoverable losses might be rare in the stock market, they can easily occur if a pension fund becomes insolvent.    

Regarding the retirement savings crisis, Hodgson noted that it’s not hard to imagine an individual socking away 10% of pay for 45 years, earning a real return of 3.5% and funding a 21-year retirement with savings equal to about 10 times final earnings. Any single person might have a good chance of accomplishing that, all things being equal.

But the likelihood that everyone can accomplish this feat is much lower, he points out. Americans are always accused of under-saving. But the current average savings level of about 3.3%, he said, might represent an equilibrium. Additional saving might trigger Keynes’ paradox of thrift, where over-saving leads to under-consumption and an economic slowdown. 

If we’re already saving as much as we can without creating unintended consequences, he adds, then the idea that, collectively, we can all afford the kind of retirement we imagine (based on our experiences during the singular post-World War II boom) is mathematically unlikely. There will be winners and losers—perhaps more losers than winners—but most Americans seem to accept that.    

© 2013 RIJ Publishing LLC. All rights reserved.

As strange as it may appear, much of finance and economics implicitly assumes we have infinite lives all running in parallel. To illustrate the point, consider the following gamble.

Experiment 1

You will roll a fair die and if you roll any number from one to five I will pay you 50% of your current wealth, including the present value of your future earnings. This is a thought experiment so we will gloss over my ability to pay – assume my credit is pristine. Imagine how much better your life would be if you were one-and-a-half times richer in the time it took to roll a die. The downside, paltry in comparison, is that if you roll a six you will pay me your entire wealth – house, pension pot, all future earnings, the lot. Will you take the gamble?

The way we have been trained to analyze the gamble means that we will consider all the possible future outcomes and then weight them in accordance with their probability. In effect we freeze time and take multiple copies of the world and then run the six versions forward as ‘parallel universes’.

In one of those worlds a one is rolled and we pocket a 50% gain in wealth. In the second a two is rolled with the same result. In the sixth world a six is rolled and we lose all our wealth. Having exhausted all the possibilities we travel back in time to the present and do our sums.

The expected return of the gamble is the ensemble average – the average of all the possible independent outcomes. In this case the expected return is 25% and so we would be ‘crazy’ not to take it.

So would you take the gamble? The answer is typically ‘no’.

Instinctively, something doesn’t feel right. Either you don’t trust my credit, or the ensemble average (expected return or expected value) is misleading in some way. So let’s consider the time average instead. Instead of rolling the die once in each of six parallel universes, we will stay in our familiar universe and roll the same die six times in succession.

We compute the time average by taking each of the six possible independent outcomes and making them occur one after the other in our single, real, universe. We now compound our returns over the six periods and take the sixth-root to calculate our per-period expected (time average) return. It doesn’t matter what order we roll each of the numbers one to six, we will lose all our wealth and so the time average is negative, and in a big way (minus-100%).

So the ensemble average is misleading. The 25% expected return unhelpfully disguises the meaningful (16.7%) likelihood that we lose everything.

The point of this thought experiment is to introduce the notion that we cannot go backwards in time, as once we have lost everything we can’t go back and try again. The more subtle point is that the traditional calculation we use, the expected return (ensemble average), effectively under-weights the significance of extreme risks.

Experiment 2

We can illustrate this with a more realistic thought experiment. Consider a world, in which we are investing our portfolio of financial assets, where there are two types of outcomes; good outcomes, which produce a return of five percent and occur almost all the time, and extreme outcomes which only occur once in the distribution but cause severe or total loss.

If the ensemble average truly does understate the significance of the single extreme event then it will consistently overestimate the likely return our portfolio will achieve relative to the return the time average suggests we will achieve.

Table 2 shows that this is indeed the case for a number of ‘runs’ of our thought experiment world. The pairs of columns represent runs for worlds with different probabilities for the single extreme outcome starting with one-in-1000 and moving right to one-in-100. The rows also show different worlds, where the severity of portfolio loss increases from 99% in the first row to 100% in the bottom row.

Note that for all 20 runs (combinations of probability and severity) the ensemble average return is always higher than the time average return, and in some cases significantly higher. In addition, please note that once the probability of the extreme event gets up to one-in-100, or higher, then 99 good outcomes of five percent are wiped out by a single extreme event.

Finally, note the difference in the time average return between extreme losses of 99.999% and 100%. Like our artificial die throwing experiment above, once you have lost all your wealth the game is over and your return is minus-100%, whether that occurs in the first period or the last period. Losing 99.999% of your portfolio would clearly be painful, but the little that is left can then start to grow again. Essentially this is highlighting the difference between an existential risk and a risk where ‘life’ continues into the next period, albeit in very poor shape.

Table 2 here

Now, it is possible to object that a loss on a portfolio of 99% or more is too extreme to realistically contemplate. The point of a portfolio, after all, is to diversify against such extreme losses. Clearly this is a valid objection; however this is a thought experiment so the value is in what it teaches rather than the realism.

That said, I believe that some of the extreme risks that we discuss below* could indeed cause portfolios of financial assets to become worthless. Besides, there are several historical examples of entire stock market losses.

Returning to the learning point though, rather than consider a literal 99% loss (or greater) instead consider what effect a large portfolio loss could have on a retirement fund. Here you can mentally adjust ‘large’ as you see fit, but perhaps start with a 50% loss and adjust higher and lower.

If the retirement fund is a defined benefit arrangement and the sponsoring employer is now small relative to the fund, or has ceased trading, then I would argue that a large, and feasible, portfolio loss can represent an existential event in that context. By ‘existential’ in this instance I mean that the mission of the retirement fund will have failed at that point. The assets will run out before the liabilities are paid and, absent an insurance arrangement, some of the beneficiaries will receive nothing. So for them at least this would equate to a total portfolio loss.

If instead the retirement fund was a defined contribution arrangement then it is less likely that the large portfolio loss would qualify as existential. This is due to the fact that there is no contractual benefit to be broken. Instead the members ‘get what they get’ and the adjustment mechanism is up to the individual member, perhaps by accepting a lower standard of living in retirement than hoped for. Even here, however, not all members are equal.

A 50% loss for a 29-year-old is fundamentally different to a 50% loss for a 59-year-old, and the older member may be tempted to consider that they had suffered a loss bordering on the existential. The practical takeaway is that avoiding, or reducing the probability of 100% (existential) losses is incredibly valuable and should become a top priority.

I am arguing that extreme risks matter, and deserve more attention than they have been given thus far. In addition, the global economic environment continues to be characterized by significant imbalances and consequently is not in good shape to withstand any further major shocks.

Partly as a consequence of economic conditions and the ever-present risk of extreme events, but also due to very nature of the retirement system and Keynes’s paradox of thrift, I believe that retirement for the masses (as currently configured in terms of length, quality of life, and degree of financial freedom) is at serious risk.

Or, rather, that retirement as currently configured was never affordable, but this fact was hidden by demographic and debt trends over many decades. Serious collective discussion and actions could lessen this risk to retirement for the benefit of all—albeit that the most obvious action is to lower the general level of expectations concerning retirement.

© 2013 TowersWatson.

To the frustration of many academics and public policy makers, most Americans claim Social Security earlier (near age 62) rather than later (until age 70), and therefore get a longer period of lower monthly benefits instead of a shorter period of larger ones.

Hoping to encourage more people to work longer, delay Social Security payments, and boost their incomes at higher ages, a team of retirement researchers from Goethe University in Frankfurt, Germany and the Wharton School at the University of Pennsylvania have proposed a change in Social Security policy that involves a lump sum payment at retirement.

The researchers suggest that instead of giving Americans increasingly higher monthly benefit for waiting past age 62 to claim benefits (to a maximum age of 70), the Social Security Administration might present the premium for delay as a lump sum, which they could spend, invest, or use to fund a legacy.

“This lump sum payment would be equal, in present value terms, to the additional benefit stream paid to the worker claiming Social Security benefits after the NRA,” wrote researchers Jingjing Chai, Raimond Maurer and Ralph Rogallo of Goethe University and Olivia Mitchell of Wharton.

“Under the Social Security system’s current rules, a worker who delays claiming her benefit until after the Normal Retirement Age (NRA) is entitled to a benefit increase of about 8% per year that retirement is deferred,” they added.

“In our model, under an actuarially fair lump sum scheme, an individual who opted to work to age 66 instead of claiming benefits at age 65 would then receive a lump sum worth of about 1.2 times her age-65 benefit, plus the age-65 benefit stream for life.

“Similarly, an individual deferring retirement even later, to age 70, would receive a lump sum worth about 6 times the starting-age annual benefit payment, plus the age-65 benefit stream for life.”

Thus, for someone who might have received $1,800 a month at normal retirement age and $2,400 a month if she waited until age 70, could instead receive at age 70 a lump sum payment of  $129,600 and a monthly benefit of $1,800 per month. The researchers believe that such a modified incentive would raise the average retirement age in the U.S. by 1.5 to 2 years. They wrote:

“In years to come, US policymakers will be actively seeking ways to reform Social Security to restore the system to solvency. Proposing cuts in benefits tends to be quite politically difficult.

“By contrast, offering a fair lump sum in place of the delayed retirement annuity credit may be more politically attractive. By (voluntarily) delaying their retirement date due to the lump sum option, workers would continue to pay Social Security payroll taxes for more years, which could help return the system to solvency via additional payroll tax collections.

“Moreover, such a policy could be designed to be cost-neutral, albeit in the real world one would also need to consider additional issues including spouse and survivor benefits, changes in annuity factors, sudden demands for liquidity due to health shocks, and other factors.”

© 2013 RIJ Publishing LLC. All rights reserved.

Northwestern Mutual now 114^th on Fortune 500 

Strong financial and sales performance in 2012 helped Northwestern Mutual move up two positions on the FORTUNE 500 list to No. 114, the company said in a release.  

In 2012, Northwestern Mutual set a new annual record for the number of insurance policies purchased. Including life, disability income and long-term care, policies purchased were up 13% over 2011 and represented the most purchased in any year in company history.

The company’s combined 2012 new premium sales for life, disability income and long-term care insurance totaled $1.03 billion, up 11% over 2011. Annuity sales also increased 11% to a record $1.7 billion, the mutual insurer said.

Jackson reports 1Q 2013 sales and deposits of $6.2 billion

Strong sales of its Elite Access variable annuity helped Jackson National Life generate more than $6.2 billion in total sales and deposits during the first quarter of 2013, an increase of 6.3% from prior year quarter, the company said in a release.   

 “We continue to price all of our products conservatively to help Jackson maintain a strong capital position, which is in the best interests of all of our stakeholders,” said Mike Wells, president and CEO of the U.S.-based subsidiary of the UK’s Prudential plc.

Elite Access, which features alternative asset investment options and has no lifetime income rider option, recorded $835.6 million and Jackson sold $3.7 billion in other VA contracts (Perspective series) during the first quarter of 2013, compared to $11.5 million and $4.4 billion, respectively, in first quarter 2012.

Following market trends, Jackson’s fixed index annuities sales rose while traditional fixed annuity sales fell. FIA sales totaled $531.4 million, up from $391.7 million in first quarter 2012. First quarter 2013 fixed annuity sales were $223.3 million, down from $255.1 million during the same period in the prior year.

In the first quarter of 2013, Jackson issued $238.7 million in institutional products (guaranteed investment contracts, medium-term notes and funding agreements), up from $118.8 million in the first quarter of 2012.   

Deposits at Curian Capital LLC, Jackson’s asset management subsidiary, totaled $677.6 million during the first quarter. Assets under management in Curian’s core business increased to $9.6 billion as of March 31, 2013, up from $8.9 billion at year-end 2012.

National Planning Holdings, Inc., a Jackson-affiliated network of four independent broker-dealers, reported gross product sales of $5.1 billion during the first quarter of 2013, compared to $4.2 billion in the same period of 2012, yielding IFRS revenue of $225.8 million and $197.0 million in the first quarters of 2013 and 2012, respectively.

During full-year 2012, Jackson ranked:

• First in total annuity sales, with a market share of 10.2%
• Second in VA new sales, with a market share of 13.8%
• First in VA net flows
• Sixth in total VA assets
• Sixth in FIA sales, with a market share of 5.1%   
• Seventh in fixed-rate deferred annuity sales with a market share of 3.6%.

As of May 6, 2013, Jackson had the following ratings:

• A+ (superior) —A.M. Best financial strength rating, the second-highest of 16 rating categories;
• AA (very strong) —Standard & Poor’s insurer financial strength rating, the third-highest of 21 rating categories;
• AA (very strong) —Fitch Ratings insurer financial strength rating, the third-highest of 19 rating categories;
• A1 (good) —Moody’s Investors Service, Inc. insurance financial strength rating, the fifth-highest of 21 rating categories.