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: Jun 25, 2007

It’s about time we checked back in on variable annuity lifetime Guaranteed Minimum Withdrawal Benefits (GMWBs) and our goal for this report will be to offer highlights of the latest filings and attempt to identify the most dominant product development trends...


Posted By: Steven D. McDonnell Posted On: Jun 18, 2007

Since the topic has been on the minds of our contacts and colleagues, in this report we’re going explore the topic of variable annuity net flows, a measurement somewhat controversial when introduced to the industry several years ago, and which at times has proven difficult to apply to the complexities of insurance products...


Posted By: Steven D. McDonnell Posted On: May 21, 2007

With this report we’re going to take a little time to consider what’s currently popular in variable annuity contract designs, based on our understanding of sales trends and our evaluations of new products filed this year…


Posted By: Steven D. McDonnell Posted On: May 07, 2007

For the publicly-traded variable annuity insurers we track on a quarterly basis, 2007 seemed to start off on a slow note, at least on a sequential basis: a few companies saw modest increases in sales and deposits compared to last fourth quarter while the others were flat or down. And, as has been the case of late, just a few firms had positive net


Posted By: Steven D. McDonnell Posted On: Apr 30, 2007

As the May prospectus update season is now in full swing, we anticipate that a fresh stream of new variable annuity living benefit concepts will be coming out due to competitive pressure. It’s always challenging to monitor all the changes, but we know it’s important to do so in order to keep up what’s perceived as cutting-edge in the industry...


Posted By: Steven D. McDonnell Posted On: Apr 23, 2007

In this commentary we’re going to quickly give our perspective on news and developments related to variable annuities and defined contribution (DC) plans, especially 401(k)s, since many insurers perceive these programs to be a possible source of future sales growth...


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


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