Page 17 - Investment Advisor March 2022

ents of the burden of trying to time 5. WILL THE COMPANY PROVIDE THE ness processes and well-designed
the market. SUPPORT NEEDED THROUGHOUT materials.
THE SALES PROCESS? • After the sale: Exceptional cus-
4. IS THE COMPANY A QUALITY The relationship between carrier, finan- tomer service, expedient commis-
CARRIER? cial professional and client is a long- sions process and strong claims
The strength and stability of a carrier is term commitment. The carrier you paying abilities.
critical when selecting a product, espe- work with should be able to provide As with all investment vehicles, it’s
cially one designed for long-term sav- support before, during and after the important to level with your client on
ings. Look for a highly rated carrier sale. This support includes but is not their financial goals and risk toler-
with a strong business model, sufficient limited to: ance before making a decision. Before
capital and experienced leadership. The • Before the sale: Product training, you offer a RILA to your client, be
carrier you decide to work with should education and forward-thinking sure to select a carrier and product
be able to meet the challenges of today’s thought leadership. that checks all the boxes. This could
marketplace, give clients confidence and • During the sale: Dedicated sales set them apart and help them achieve
help you build your business. support, established new busi- retirement success.

S&P Analysts Look at U.S. ities base their crediting rate option
Issuers of non-variable indexed annu-
Annuity Market, See Cannibals menus on investment indexes but also
promise to protect holders against loss
of principal resulting from investment
ating analysts at S&P Global life insurers may have trouble repeat- index fluctuations.
Ratings predict that sales of ing the strong annuity sales gains they Abhyankar said in the web event
R RILAs will continue to grow — recorded in 2021. Abhyankar and other that she expects RILAs to eat the
by crowding out sales of fixed annuities, S&P analysts suggest in a life insurance market share of non-variable indexed
non-variable indexed annuities and tra- sector report, which came out in early annuities as well as that of traditional
ditional variable annuities. February, that annuity sales have fluctu- variable annuities. “More and more
The analysts talked about the annuity- ated around $230 billion per year for the companies are likely to enter the RILA
eat-annuity world in a web meeting S&P last decade, “with one annuity product’s space,” she said.
held in January to address hot topics in sales growth coming at the expense of Some companies have been leav-
the world’s insurance markets. Their another’s contraction.” ing the variable annuity market,
conclusion was that the life, health and Although the number of people Abhyankar said.
annuity issuers they rate are doing well, approaching retirement age is growing, New, private-equity-backed players
despite the effects of the COVID-19 pan- low crediting rates may be a turnoff, and are entering the fixed and non-variable
demic and low interest rates. many people may simply lack the sav- indexed annuity markets, and that com-
“Most companies are entering 2022 ings they need to pay for annuities, the petition is pushing some other players
on a relatively strong footing,” said analysts concluded in the report. out of those markets, she said.
Heena Abhyankar, an S&P director who In the S&P report, analysts noted that
serves as a lead analyst for the U.S. life RILAs VS. OTHER ANNUITIES the remaining players in the non-RILA
insurance market. RILAs are variable annuities, meaning annuity markets may not be interested
Capitalization levels are high, any that a RILA issuer can expose the hold- in expanding their annuity sales enough
problems with investments are manage- er to the risk of principal loss. Issuers to make up for the departures of the
able and the current level of pandemic- build the products around easy-to- other players.
related life insurance claims has been hedge investment indexes, rather than
handled, Abhyankar said. using the kinds of mutual fund-based Rod Mims is senior vice president, distribution,
investment options that dominate tra- at Athene USA. Allison Bell is insurance editor
THE ANNUITY MARKET ditional variable annuity investment of Investment Advisor Group. She can be
One cloud, Abhyankar said, is that option menus. reached at [email protected].

MARCH 2022 INVESTMENT ADVISOR 15