Variable annuities

Soleares Research, LLC is a market research and consulting firm servicing the annuity and life insurance businesses. We provide, through our website, periodic articles that cover important industry trends; we also offer clients phone or on-site consultations, executive briefings and presentations. We pride ourselves on first-class customer service and responsiveness to our clients. We aim to be an indispensable resource to the marketplace.

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Posted By: Steven D. McDonnell Posted On: Apr 16, 2007

If there’s any one trend in variable annuity design we see building momentum, it’s that of insurers offering contracts with lower-than-average costs, usually combined with a relatively modest number of sub-accounts and optional benefits. Since last year we’ve been reporting on such products coming out and lately we’re seeing even more...


Posted By: Steven D. McDonnell Posted On: Apr 09, 2007

Maybe we’ve said this all too often, but a pervasive theme in variable funds of late has been that of asset allocation, and in March this held true again, as there were a number of new registrations of portfolios that spread their investing among baskets of underlying options, whether they be target strategies or Exchange-Traded Funds (ETFs). And


Posted By: Steven D. McDonnell Posted On: Apr 02, 2007

There’s little doubt that success in the variable annuity marketplace over the years has been largely dictated by product and distribution strength, competition depending on what’s currently in favor, whether it be the latest VA chassis, living or death benefit, underlying fund type or what have you. But recently insurers have become concerned ab


Posted By: Steven D. McDonnell Posted On: Mar 26, 2007

With this commentary we’ll follow up on our previous report by reflecting on some important themes in the variable annuity industry and how they are intimately connected to the products, features and funds being marketed these days. We’ll also suggest how these issues might play out in the future...


Posted By: Steven D. McDonnell Posted On: Mar 05, 2007

The rate of filing activity around variable annuity Guaranteed Minimum Withdrawal Benefits (GMWBs) remains vigorous and will probably pick up as we approach the May prospectus update season. Since the beginning of the year some unique new designs have been introduced, as well as numerous modifications, special provisions and other tweaks, sometime


Posted By: Steven D. McDonnell Posted On: Feb 26, 2007

For the fourth quarter of 2006 variable annuity sales grew for all the publicly-traded insurers we track, reflecting the experience of the industry as a whole, which we hear rebounded from the lackluster sales of the prior quarter. Moreover, many company executives and industry observers have a positive outlook on the business for the year ahead..


Posted By: Steven D. McDonnell Posted On: Feb 05, 2007

We’re constantly maintaining that the importance of living benefits to the variable annuity business cannot be overstated. Although most of the market right now is concentrated on lifetime withdrawal benefits, there’s been resurgence in competition surrounding Guaranteed Minimum Income Benefits (GMIBs), and they remain a crucial part of some insur


Posted By: Steven D. McDonnell Posted On: Jan 15, 2007

This week we’re going to continue on the theme of our previous commentary by noting more adjustments insurers are making to their variable annuity living benefits, fees and related provisions…


Posted By: Steven D. McDonnell Posted On: Jan 01, 2007

In getting started with the New Year, we’ll comment on a growing tendency for insurers to trim the number of sub-account options and features on their variable annuities in order to make them simpler for advisors to sell and investors to understand – not to mention easier to hedge against market risk. In this report we’ll look at some recently-fi


Posted By: Steven D. McDonnell Posted On: Dec 18, 2006

As the holiday season is now upon us, in our last commentary of the year we’ll take the opportunity to quickly consider how things went for the variable annuity business in 2006, using currently-available data, and suggest some lessons and implications for the future. Once full-year sales are posted we’ll revisit these thoughts and discuss the yea


Posted By: Steven D. McDonnell Posted On: Dec 04, 2006

One topic we plan to tune into regularly in our reports is the use of variable annuities in qualified plans, a practice that has its critics, yet quite a few industry observers think this section of the market offers insurers an excellent chance for true “organic” sales growth in the years to come...


Posted By: Steven D. McDonnell Posted On: Nov 27, 2006

This year we haven’t seen as many new variable annuity contracts being registered as in the past, a fact we think reflects current conditions like the consolidation of market share, the competition around benefit features (rather than contract structure) as a generator of sales, and the continued criticism, in some circles, of VA fees and expenses.


Posted By: Steven D. McDonnell Posted On: Nov 06, 2006

The third quarter was a mixed bag for the nine major public variable insurers we regularly track, as all saw sales levels fall sequentially, but apparently these companies don’t feel the results were troubling and still have plenty of optimism. Nearly all the conference calls reflected the competitive pressure around benefit guarantees, yet some e


Posted By: Steven D. McDonnell Posted On: Oct 30, 2006

A sentiment we’ve been hearing from industry executives lately is that the variable annuity business already has a plethora of products and features due to the competitive “arms race” that has taken place in recent years, therefore a priority for insurers should be to focus more on helping financial advisors and their clients meet the challenges an


Posted By: Steven D. McDonnell Posted On: Oct 23, 2006

In the coming months, an issue of much interest to annuity issuers will be that of an impending change in accounting for Deferred Acquisition Costs (DAC) on internal replacements that will impact how companies conduct conservation programs and may ultimately influence how products are designed in the future...


Posted By: Steven D. McDonnell Posted On: Oct 16, 2006

We’ve seen a number of new variable annuity lifetime withdrawal benefits filed recently, and some won’t roll out until early next year. For those that will be introduced in the last two quarters it may be a good time to do so, since there’s less competition for the “mind space” than in the May filing season, less noise to contend with...


Posted By: Steven D. McDonnell Posted On: Oct 02, 2006

In our last report we discussed how insurers are building fee reductions into their variable annuities, which we think is good for the industry in that it may help counter some negative perceptions. This week, we’re following up on recent media coverage on the pricing front, and we’ll touch on some other hot-button issues as well...


Posted By: Steven D. McDonnell Posted On: Sep 25, 2006

Lately insurers have started to introduce greater choice in variable annuity expense structures, probably due to the ongoing criticism of product fees by regulators, press and other observers, coupled with a sincere desire to provide flexibility to consumers. We’re not sure whether these changes will prompt an investor to buy one annuity over anot


Posted By: Steven D. McDonnell Posted On: Sep 11, 2006

Variable annuity benefit tweaking and modifying has been happening a bit less frequent lately, and we attribute this to the summer slowdown. Filing activity ought to be picking back up as we get into the latter part of the year, and The Soleares Report plans to consider how future tactical changes might offer clues as to how VA features play in th


Posted By: Steven D. McDonnell Posted On: Aug 14, 2006

We always look forward to reviewing major public insurers’ quarterly calls during earnings season, as these companies in many ways act as barometers for the health of the variable annuity business as a whole. In this report, we’ll go over the second-quarter reports of nine insurers, more or less in chronological order, and try to identify reasons


Posted By: Steven D. McDonnell Posted On: Jul 31, 2006

It’s about time we issued one of our periodic updates on what’s happening in variable annuity lifetime withdrawal benefits, because they are so important to sales and the filing activity around them still vigorous. The current reality is that it’s crucial for insurers to constantly come out with new GMWBs and/or upgrades to maintain momentum. To


Posted By: Steven D. McDonnell Posted On: Jul 24, 2006

We recently took time to reflect on divergent trends within the pricing and structure of variable annuities, a topic that should become more “front-and-center” in the future and cut across distribution outlets, since products and channels are uniquely interrelated; as in when one type is doing well, the other may suffer and vice versa...


Posted By: Steven D. McDonnell Posted On: Jul 17, 2006

We’ve identified a few brand-new variable annuity benefit guarantees filed over the past couple of months, but more frequently we’ve been seeing modifications of existing riders, such as clarifications to special provisions, pricing adjustments and instances where companies have made special benefit versions just for individual states. We’ll be di


Posted By: Steven D. McDonnell Posted On: Jul 03, 2006

The sale of annuities in qualified plans has been a controversial subject over the years and the target of a number of law suits alleging that the practice is inappropriate. Lately there have been some new developments on this front that should give insurers pause, although some industry leaders still feel quite optimistic about the continued use


Posted By: Steven D. McDonnell Posted On: Jun 19, 2006

We’ve long been noting how variable annuity insurers are faced with multiple opposing pressures. On the one hand, critics of the business clamor for annuities that are easier to understand and less expensive than the norm. Meanwhile, the current reality is that investors and advisors are favoring products with generous guarantees, causing insure


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