Legacy Marketing Group has launched the ClassicMark single premium fixed indexed annuities (FIA), its newest FIA series aimed at investors seeking retirement products offering exposure to the market.
The annuities provider has included for the first time as a reference for one of its annuities the Morgan Stanley Target Equity Balanced Index, a proprietary rules-based index strategy from Morgan Stanley that uses portfolio construction concepts to seek positive return opportunities in different market environments. The Index allocates between stocks contained in the Target Equity US Index and a 10-Year US Treasuries Futures Index, giving exposure across US equities that are thought to be undervalued, as well as US fixed income.
The index seeks to build a liquid and risk-balanced portfolio with a daily rebalancing mechanism. It allocates dynamically to assets that exhibit strong upward trends and seeks to pare back investments during market corrections. The portfolio risk is monitored daily with a 6.5% volatility target mechanism intended to keep volatility under control and reduce the impact of price.
The Morgan Stanley index follows the BNP Paribas Momentum Multi Asset 5 Index which was deployed by the firm on the FlexMark Select Series launched in October 2017. The new ClassicMark range also offers several interest crediting strategies including multiple uncapped participation rate strategies to well-known indices such as the S&P 500 index, S&P 500 Risk Control index, and DJ Real Estate index. Legacy is offering four 10-year product versions including the ClassicMark 10; ClassicMark 10 Plus with 4% upfront bonus; ClassicMark 10 LT in lower surrender charge states; and ClassicMark 10 LT Plus with 3% upfront bonus in lower surrender charge states. This new product series is offered exclusively through agents contracted with Legacy and Americo and is currently available in 44 states and the District of Columbia.
Legacy President Preston Pitts said the new series was designed to respond to demand from advisers 'looking for strong consumer value that's easy to explain and easy for consumers to understand'.
Prudential subsidiary Jackson National Life Insurance Company has also launched MarketProtector and MarketProtector Advisory, two new fixed annuities with index-linked interest. These products are targeted at investors seeking 'tax-deferred investment growth, protection from market risk and the flexibility to adapt to changing needs in retirement'. Both products offer IncomeAccelerator, an add-on lifetime income benefit that allows consumers to safeguard their financial futures with income that lasts as long as they do.
MarketProtector's and MarketProtector Advisory's also offer exposure to the S&P 500 and MSCI EAFE index and two credit methodologies aimed at increasing the potential income by allocating index gains via an annual reset point to point performance trigger and an annual reset point to point. Both options can earn interest in a variety of market conditions.
In addition, American Equity Investment Life Insurance Company has added a new fixed index annuity series to its portfolio. The IncomeShield series offers seven or 10 year surrender schedules and five or seven year interest crediting options. A seven percent premium bonus is also available on the IncomeShield 10.
American Equity uses four common indexes including the S&P 500 Index, S&P 500 Dividend Aristocrats Daily Risk Control 5% Index; Dow Jones Industrial Average (DJIA) and 10-Year US Treasury Bond index.
Despite uncertainty around the implementation of the Department of Labor (DoL) fiduciary rule in 2017 which impacted annuity sales, indexed annuity sales remain healthy and totalled $14.7bn in Q4 2017, a seven percent rebound from the prior quarter and a five percent increase year on year. For the year, fixed annuity sales fell five percent to $57.6bn, compared with prior year.
SRP data shows that the S&P 500 index (82 products) is the most utilised index in the US annuities market followed by the Nasdaq-100 index (16 products), DJ Industrial Average Index (14 products), Russell 2000 index, S&P Midcap 400 ETF TRST, Bloomberg Barclays Aggregate Bond Index (11 products apiece) and the ML All Convertibles Investment Grade (two), according to SRP data.
The US variable annuities market has been hit by the low interest rates environment, but structured VAs are providing a positive story for the three major insurers in the US: MetLife (distributor of Shield Level Selector), Allianz Life (Index Advantage), and Axa (Structured Capital Strategies). Other sellers include Fidelity, Voya, Lincoln Financial and Pacific Life, among others.
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