5 Things Annuity Issuer Executives Are Saying Now

"As we've said previously, we expect to see a continued shift in our business mix profile over time, as we gain more cash-flow generating and less capital-intensive new business, coupled with the runoff of less profitable business," Steigerwalt said.

Robert Falzon, Prudential's vice chairman, said Prudential expects retirement, group insurance, and the newly acquired Assurance IQ business to "offset the impact from low interest rates and net outflows in our individual annuity business as we maintain pricing discipline."

At Lincoln, "to the extent sales or net flows decline in the short run because of our disciplined pricing actions, we expect to redirect capital to additional share buybacks," Glass said.

3. Increased competition may have mixed effects.

At American Financial, Lindner said, "There are some new entrants into the indexed annuity business."

Pitcher, FBL's CEO, said, "There are some competitors out there that are offering more attractive rates."

Myles Lambert, the chief distribution and marketing officer at Brighthouse, said Brighthouse likes the competitive environment.

"We think it's a good thing for our advisors and consumers," Lambert said. "It further validates the product category."

Lindner said the level of competition is similar to what American Financial has typically seen.

"There are always a couple of companies that are, we think, pricing too aggressively," Lindner said.

4. Finding attractive investments is difficult.

Lindner sees American Financial sees "lack of opportunities on the investment side."

"Given the current interest rate environment and frankly very tight spreads and lack of opportunities on the investment side currently, we're a little more cautious with our guidance on premium growth," Lindner said.

5. Analyzing how an annuity business is really doing is tricky.

Randal Freitag, the chief financial officer at Lincoln Financial, said its hard for outsiders to know how an annuity block is doing by looking at indicators other than actual earnings.

In recent years, he said, the spread between what an issuer pays the annuity holders and what the issuer earns on its own investments may have shrunk, but that narrowing may be due partly to the age of the annuities, partly to technical factors, and partly to the fact that commissions are lower than they used to be.

— Read Prudential Aims to Cut Stock-Related Annuity Risk: Earnings, on ThinkAdvisor.

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