From Steve's Blog

Subscribe to Steve's Blog

Categories

Archive



A Late Summer Interlude


Posted By: Steven D. McDonnell | Posted On: Aug 30, 2019

It was a very hot summer here in New York City, but now it’s cooling down nicely, autumn is on the way, and today I figured I’d take some time out to make a long-overdue blog post.

It had been one of my 2019 New Year’s resolutions to blog more often but, given all the tasks I assign myself each week, both business and personal, writing a fresh post is an easy thing to let fall through the cracks. I am hopeful that, from this time forward, I will sustain the blogging habit.

How do things stand now in the annuity space? Insurers finished reporting Q2 earnings and the major research outfits have been reporting industry-wide sales. Total annuity sales in the quarter were $63.9 billion, up 7% from the prior-year quarter, according to LIMRA.

On the VA side, since some public insurers had improved sales in the quarter, I suspected the industry might be flat or slightly down and the data bore me out. LIMRA said that VA industry sales were $25.8 billion, the same dollar amount as the year before and a sequential increase from the prior quarter’s $22.8 billion, the first such improvement in the past three quarters.

Meanwhile, things are looking much better on the index annuity side. LIMRA reported that FIA sales set a quarterly sales record of $20 billion in Q2, 14% better than the year-earlier quarter. LIMRA is forecasting that full-year FIA sales should top $70 billion.

Looking ahead, however, the recent drop in interest rates – last month the yield curve inverted for the first time since the financial crisis – should negatively impact fixed and FIA crediting rates, which would hurt their sales, unless further stock market fluctuations prompt investors to flock to the relative safety of such annuities compared with other investments.

On that note it’s my intention with Soleares (I’ve said as much to a few clients already) to provide increased coverage of indexed annuities, if for no other reason than they have been doing so well. I don’t intend on trying to replace any of the current providers of FIA research, rather to add my voice to the dialogue.

In The Soleares Report I will start to comment on new FIAs coming to market and notable ones already in circulation, as objectively as I can. In blog posts like this I will offer up reflections and anecdotes of a more personal nature.

Needless to say, in adding FIA coverage I’ll be putting much more on my plate. But I look at it this way: there will never be a shortage of things to write about!