Financial engineering firm Nortia has announced it will distribute a variable annuity in France through its network of advisers.
The product, Amadia, replicates a strategy followed by Terre d'Avenir, a variable annuity launched in early 2009 by insurer AG2R La Mondiale Partenaire. Terre d'Avenir and Amadia are in effect the same product, white-labelled by AG2R La Mondiale Partenaire and sold by Nortia under its own name. However, Nortia sales director Philippe Parguey said, "While differences between the two products are minimal at present, the terms on offer could diverge between the two products in future."
Oddo, another firm distributing products through financial advisory networks, also white-labels Terre d'Avenir under the name Fipavie Retraite Garantie.
These variable annuities all offer the choice of three profiles with set proportions in equities versus bonds. They pay an annual guaranteed income throughout retirement of 4.5%. The guaranteed coupon can increase during the investment term, depending on the performance of the portfolio. The guaranteed income option within Amadia costs up to 2.5% pa, depending on the selected profile, plus an added 0.96% pa management fee. Alternatively, investors can select from among 40 other investment products, which is the part of the product that is expected to diverge between the different future variants of the product.
The French retail market has three products similar to the variable annuities mentioned above: Capital Ressources (Axa Assurance), Accumulator Retraite (Axa Assurance) and Invest4Life (Allianz). Private banking investors can also choose LCL Revenus Garantis Vie, in partnership with Axa.
These products are all available on the French database.