Session 51: Recent Trend of Fixed Indexed Annuities and ... - SOA

[Pages:5]Session 51: Recent Trend of Fixed Indexed Annuities and Structured Annuities Product Development

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SESSION 51: RECENT TREND OF FIXED INDEXED ANNUITIES AND STRUCTURED ANNUITIES PRODUCT DEVELOPMENT

MAY 21, 2019

Bryan Lindsley, FSA, MAAA

? Oliver Wyman

Section 1 Product overview

Annuity sales 2008 ? 2018 FIA and RFIA sales have been the main driver of increasing annuity sales over the last several years

All figures in $B

Variable

Registered indexed1

Higher

Market risk for policyholder

Fixed indexed

MVA Book value

SPIA

Lower

DIA

2008 2009

2010 2011 2012 2013

2014 2015

2016

2017 2018

Source: LIMRA

1Also referred to as structured annuities

? Oliver Wyman

2

Section 1.1 Product overview (FIA Market)

Expanding FIA market The FIA market benefited from new entrants and wider acceptance with distributors

2011 FIA Market : $32.2B

Rank Company 1 Allianz Life 2 Aviva USA 3 American Equity 4 Great American 5 North American 6 Lincoln National 7 Midland National 8 Jackson National 9 ING 10 Security Benefit Life

Top 3 market share Top 10 market share

Source: Wink's Sales & Market Report and LIMRA

? Oliver Wyman

Sales ($B) 6.3 4.5 4.4 1.8 1.7 1.6 1.5 1.5 1.4 0.9

47% 79%

2018 FIA Market: $69.6B

Rank Company 1 Allianz Life 2 Athene USA 3 Nationwide 4 AIG 5 Great American 6 American Equity 7 Pacific Life 8 Lincoln Financial 9 Global Atlantic 10 Fidelity & Guaranty Life

Top 3 market share Top 10 market share

Sales ($B) 9.1 6.6 5.1 4.9 4.6 4.2 3.6 3.1 2.8 2.3

30% 66%

4

Competitive landscape (2005) The FIA market was previously heavily concentrated in "niche players" focusing on the independent channel

Market share and dominant distribution channels by ownership structure and credit rating

Primary distribution channels

Mutual Companies

Old Mutual (now Fidelity& Guaranty)

Allianz Life

8.7%

32.3%

Jackson National

Sun Life (now Delaware

Life)

7.5%

Independent organizations Independent and banks Banks and broker dealers

Size of bubbles represents 2005 market share

Foreign

Companies Subsidiaries

US Stock

American Equity

9.9%

Equi Trust

8.8%

All other companies

15.2%

ING (now VOYA)

AmerUs (Athene/Aviva block)

Jefferson Pilot (now Lincoln)

Midland National

Privately Held

Ownership Structure

Recent Acquirers

B

B+

B++

A-

A

A+

A++

Lower

Source: Advantage Compendium and Oliver Wyman Research

Credit Rating

Higher

? Oliver Wyman

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Competitive landscape (2013) In 2013, the market was already significantly broadened

Ownership Structure

Market share and dominant distribution channels by ownership structure and credit rating

Mutual Companies

National Life

Sagicor Life

Allianz Life

Pacific Life

Nationwide

Western & Southern

OneAmerica Jackson National

Primary distribution channels

Independent organizations Independent and banks Banks and broker dealers Career

Foreign

Phoenix

CNO companies

Genworth American Equity

10.4%

Voya

15.5%

AIG

7.9%

Protective Lincoln

Size of bubbles represents 2013 market share

Companies Subsidiaries

US Stock

Forethought

National Western

Symetra

Great American North American

Privately Held

Security Benefit

Fidelity & Guaranty

11.7%

7.1%

All other companies

Midland National

Recent Acquirers

Equi Trust

Athene

Lincoln Benefit Life

B

B+

B++

A-

A

A+

A++

Source:

Lower

Wink's

Sales

&

Market

Report

and

Oliver

Wyman

ResearchCredit

Rating

Higher

? Oliver Wyman

6

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