Iceland's economy and pension system has come back from the "kreppa" or banking crisis that struck five years ago. This country of the aurora borealis and matronymic last-names is full of surprises (Photo by Bjorn Ludviksson).
In this last article in our series on fixed indexed annuities, we consider the potential role of FIAs in providing retirees with guaranteed lifetime income. We find FIAs to be valuable, but underused for that purpose.
FIA owners can pick from an array of choices as cryptic as those on a roulette table. But if they don't understand options, how can they evaluate these safe but esoteric insurance products?
In this second article in a four-part series on the fixed index annuity (FIA) business, we profile Allianz Life, the top issuer of FIAs in the US in 18 of the last 19 years. (Image, in Allianz blue, is from an Allianz Life video.)
"In many ways, the current market is more challenging to many annuity manufacturers than the recent financial crisis,” said Joe Montminy, assistant vice president and director of LIMRA annuity research.
Notes from all over: What a government official said privately about the $3 million cap on tax-favored accumulations; Mark Cortazzo's new business of mining old VA contracts; another New York Times article that obfuscates annuities.
Venturing into the sensitive area of ethnicity, Prudential documents a need for dramatic improvement in the financial circumstances of the average African American.
The majority of the 2012 net income change for life insurers--to $34 bn from $9 bn in 2011--came from large variable annuity companies who reported lower reserves on guaranteed benefits, which more than offset the negative impact of low interest rates, Fitch Ratings said.
A new study, “Facing the Future: Blueprint for Growth,” highlights three main insurer challenges: risk, regulation and the restructuring of product offerings.
“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.
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.
"We have been trained to 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’," writes this TowersWatson analyst. But the real world, he says, doesn't work that way.
In trying to predict the future, we make two mistakes, experts said at conferences this spring. In relying on averages of potential outcomes, we assume parallel universes. And we blame “black swans” for our own failures of imagination.