“Almost every major variable annuity writer has absorbed large write-downs on ‘policyholder behavior assumption updates,’” said a Munich Re executive. “So how do we take out that risk?”
When will annuities be loved? After all the creative destruction of the past 10 years, what’s next for the annuity industry? Which trends will persist? Which products will flourish? We discuss the trends that Retirement Income Journal expects to cover in 2021 and beyond.
Fixed deferred annuities may be the most promising candidates for inclusion in 401(k) plans. But in order to adapt these contracts to the defined contribution space, they must lose some of the 'illiquidity' that helps make annuities valuable. Some innovative solutions are now on the market.
Publicly-held life insurers are using reinsurance to improve their balance sheets. But at what cost? 'I believe that many of these blocks of business are only being funded in part with real assets,' a forensic accountant told RIJ.
Investors returned to high-yield bonds in November after preferring government bonds for several months. “Investors might be trying to anticipate the potential December interest-rate raise,” wrote Morningstar analyst Alina Lamy.
Fidelity Investments is testing 'Fidelity Go,' a robo-advice portal aimed at Millennials, and building a digital interface between its affiliated advisors and its clearing service to replace the interface that Betterment Institutional provided until recently.
Total third quarter sales of indexed annuities were $13.8 billion, up 13% from the previous quarter, and up nearly 21% from the same period last year.
Only 1.8% of DC plan participants stopped contributing in the first half of 2015, compared with 2.1% in the first half of 2014.
"After years of bolstering their balance sheets, life-annuity firms are in a strong position to invest in the innovations and technologies needed to fuel growth," said Doug French, principal, Financial Services and Insurance and Actuarial Services at Ernst & Young LLP.