In this week’s annuities roundup, we look at yearly sales of indexed annuities as well as new products from Nassau, RaFi’s first multi-asset index used in the retirement space, Axonic’s expansion and more.

In the US, fixed indexed annuity (FIA) sales totaled US$95.6 billion in 2023, up 20% from the prior year. In the fourth quarter, FIA sales were US$24.6 billion, a 10% increase year-on-year (YoY), preliminary results from Limra’s US Individual Annuity Sales Survey show, or 83% of the total U.S. annuity market, according to the association.

Insurers were able to offer very competitive crediting rates while protecting the principal investment from equity market volatility, making FIA products more attractive to investors in 2023 - Bryan Hodgens, Limra

‘Insurers were able to offer very competitive crediting rates while protecting the principal investment from equity market volatility, making FIA products more attractive to investors in 2023,’ said Bryan Hodgens (pictured), head of Limra research. ‘With interest rates expected to pull back in 2024, Limra is predicting a slight decline for FIA sales in 2024, but product sales will remain historically strong and are forecasted to reach nearly US$100 billion in 2025.”

Registered index-linked annuity (Rila) surpassed traditional variable annuity sales for the first time on the back of US$13 billion in the fourth quarter, up 29% YoY. Total Rila sales reached US$47.4 billion in 2023, 15% higher than 2022.

Driven by the FIAs, total annuity sales in the US rose 23% to US$385 billion in 2023 YoY, including US$164.9 billion fixed-rate deferred, US$51.4 billion traditional variable annuity, US$13.2 billion single premium immediate annuity, US$4.1 billion deferred income annuity and US$8.4 billion structured settlement sales, according to the survey.

The top 20 rankings of total, variable and fixed annuity writers for 2023 will be available in early March.

Research Affiliates debuts multi-asset play via annuity

North American Company for Life and Health Insurance, a member of Sammons Financial Group and one of the largest FIA issuers in the US, and Annexus, an independent insurance retirement product design company, on 17 January revealed two enhancements to their Secure Horizon Plus FIA by the addition of a new index from Research Affiliates and an increase to the premium bonus.

The launch marks the first annuity product tracking an index designed by the California-based research house, as SRP first reported in December 2023. The Research Affiliates Global Multi-Asset Index provides diversified exposure to global stocks, bonds, and commodities, while using a proprietary risk management process to manage volatility.

In addition, the premium bonus of the FIA has been raised to 20% and ‘provides an immediate boost to clients’ retirement savings’.

Axonic Capital introduces insurance unit

The New York-based US$4.3 billion asset manager specializing structured credit, commercial real estate and systematic fixed income, has formally launched Axonic Insurance to ‘capitalize on the evolving needs of insurance customers and clients’. The new unit will provide investment advisory services for insurance-company general account portfolios by working with institutions to design, manufacture, and distribute fixed annuities globally.

Highlighted offerings are fixed annuities, FIAs and income annuities in addition to insurance portfolio management and third-party product development. In November 2023, the US company unveiled its plan to offer FIAs to Asia through insurance platforms, private banks and independent wealth managers.

‘We believe our technology platform will change the way annuity and insurance products are developed, deployed, distributed, and maintained, reducing time to market, improving risk management, and facilitating the integration of insurance and asset management to create better solutions for clients,’ said Michael Gordon (above right), head of Axonic Insurance.

Nassau introduces new FIA

Nassau Financial Group has added a ‘new, innovative’ FIA to its product portfolio - Nassau Income Accelerator - which features single premium with flexible guaranteed lifetime income options. Indexed accounts offer exposure to the Nasdaq 100, Smart Passage SG Index and S&P 500. Engineered by Société Générale, the Smart Passage SG Index selects 200 out of 500 stocks from the S&P 500 with the lowest volatilities.

‘For retirees faced with the tough decision of when to start their Social Security payments, Nassau makes it easier with our latest innovative annuity product, Nassau Income Accelerator,’ said Phil Gass (above right), chairman and CEO of Nassau.

To be issued by the Connecticut-based insurer, the new offering features choice of three guaranteed minimum withdrawal benefit riders: Flex-Forward Income BenefitSM, Income Horizon: Early and Income Horizon: Later.

DoL fiduciary proposal faces criticism at hearing 

A house hearing on the Labor of Department (DoL)’s proposed fiduciary rule was held on 10 January. Witnesses included Bradford Campbell, Partner, Faegre Drinker, Susan Neely, President and CEO, American Council of Life Insurers, Jason Berkowitz, chief legal & regulatory affairs officer, Insured Retirement Institute (IRI), Marc Cadin, CEO, Finseca and Kamila Elliott, CEO, Collective Wealth Partners.

‘Retirement savers should be able to select their preferred source of professional guidance to help them prepare for retirement and to choose retirement savings strategies and products that best fit their individual needs,’ said Berkowitz at IRI. ‘The DoL’s proposal would impair their ability to do so.’

If going live, the rules are expected to have a profound impact on the FIA industry, as the products are among the investment products targeted around ‘junk fees’ which are not regulated by the Securities and Exchange Commission (SEC).