Timothy C. Pfeifer, FSA, MAAA Pfeifer Advisory LLC May 21, 2012.

Slides:



Advertisements
Similar presentations
State of the U.S. Life Insurance Industry
Advertisements

Life Insurance Policies “Whole Life Insurance”
Copyright © 2008 Pearson Addison-Wesley. All rights reserved. Chapter 14 Annuities and Individual Retirement Accounts.
Sales and Trends in Indexed Annuity Product Development Iowa Actuaries Club February 22, 2008 Sheryl J. Moore President and CEO AnnuitySpecs.com Advantage.
National Life Insurance Company ® | Life Insurance Company of the Southwest™ National Life Group ® is a trade name of National Life Insurance Company,
Annuity Liquidity Program™ Stone Street Capital’s.
1 PR /09 FOR AGENT USE ONLY. NOT TO BE USED FOR CONSUMER SOLICITATION PURPOSES. Rapid Builder IUL is Designed to Provide: Early cash value growth.
Why Partner with SunAmerica Variable Annuities?
Agent Sales Primer. ** For Agent Use Only ** © 2005 J.G. Wentworth2 Who is J.G. Wentworth?  14+ years experience with 42,000+ transactions worth over.
Intensive Actuarial Training for Bulgaria January, 2007 Lecture 2 – Life Annuity By Michael Sze, PhD, FSA, CFA.
The Fixed Annuity Marketplace BRAMCO Annuity Bootcamp Timothy C. Pfeifer, FSA Pfeifer Advisory LLC February 3, 2009.
Recent Developments in Indexed Annuity Disclosure and Illustrations Actuaries Club of Boston Annual Meeting September 22, 2011 Kathryn Dowdell, FSA, MAAA.
CN For agent use only. Not for use with the public. ING Annuity and Asset Sales Presents: ING Performance Trigger Index Strategy – A Story.
1 EXIT NG260 FOR AGENT USE ONLY. NOT TO BE USED FOR CONSUMER SOLICITATION PURPOSES Custom GrowthCV sm Universal Life Insurance Designed for Cash Value.
Crafting Successful Product Portfolios for 2010 and Beyond March 2, 2010 Timothy C. Pfeifer, FSA, MAAA Pfeifer Advisory LLC.
The Perfect Plan… To Rescue Poorly Performing Assets Agent Use.
1  Overview  Product Summary  Sales Ideas Agent Training Presentation.
1 Indexing Options and More June 20, 2012 Tim Hill, FSA, MAAA Milliman, Inc.
What’s Next for Fixed Indexed Annuities and their Income Riders? Presented by Noel Abkemeier Iowa Actuaries Club March 12, 2013 Page based on Title Slide.
SESSION 19A: PRIVATE COMPANY VALUATION Aswath Damodaran 1.
© 2008 Morningstar, Inc. All rights reserved. 3/1/2008 LCN Understanding Deferred Annuities.
Timothy C. Pfeifer, FSA, MAAA Pfeifer Advisory LLC October 15, 2012.
What to Sell in a Low Interest Rate Environment. My Old Pappy use to say “If you live by the rate, you die by the rate.”
Personal Choice Annuity Personal Choice Annuity Agent Training.
Variable & Variable Universal Life Insurance  Variable Life  Combined traditional whole life insurance with mutual fund type of investments 
SecureLiving Index 5 is a single premium, fixed deferred annuity designed with opportunities in mind. Your clients can feel confident they have taken steps.
Timothy C. Pfeifer, FSA, MAAA Pfeifer Advisory LLC June 7, 2011.
For agent information only. Not for solicitation or advertising to the public. Availability of product, product features and benefits may vary by state.
Growth. Liquidity. Benefits. With Marty Ruby, FSA.
Withdrawal Benefit Rider (the Income Outlook Plus 5) & the Ultra Future FIA 15% Bonus! Lifetime Income and Amazing Liquidity.
Hybrid LTC Strategies Copyright © C.O.R.E. GROUP USA, INC. and C.O.R.E. Marketing, Inc. All rights reserved. Marvin Johnson Relationship Manager.
Timothy C. Pfeifer, FSA, MAAA Pfeifer Advisory LLC.
 Characteristics  Provides protection for the entire lifetime  Level or fixed periodic premiums payable for the lifetime of the insured  Level.
Momentum Protected Index Plan (Momentum PIP) - 100% Option
Timothy C. Pfeifer, FSA, MAAA Pfeifer Advisory LLC April 17, 2013 LOMA/ LIMRA/SOA Life Insurance Conference.
Sentinel Plan® Summit Bonus Index℠ INTRODUCING THE NEW Summit Bonus Index℠
Timothy C. Pfeifer, FSA, MAAA Pfeifer Advisory LLC May 5, 2015 Session 21-Annuity Hot Topics.
Life Insurance In Qualified Plans Chapter 32 Tools & Techniques of Life Insurance Planning  What is it?  Life insurance is purchased and owned.
Spotlight on Variable Annuity L Shares
Timothy C. Pfeifer, FSA, MAAA Pfeifer Advisory LLC Naples, Florida February
Great American Life An American Company date. Family of Companies Great American Life Insurance Company Annuity Investors Life Insurance Company * For.
Timothy C. Pfeifer, FSA, MAAA Pfeifer Advisory LLC April 13, 2010.
Timothy C. Pfeifer, FSA, MAAA Pfeifer Advisory LLC October 23, Annual Conference.
Society of Actuaries annual meeting 111 Panel Discussion Indexed Product Deep Dive (Life and Annuity) Timothy C. Pfeifer, FSA, MAAA Pfeifer Advisory LLC.
AMERICAN NATIONAL INSURANCE COMPANY Nearly $1.5 Billion in Annuity Premium in ’04 Over $18 Billion in Assets* Over $3 Billion in Capital Surplus** $125.
Longevity Risk Management and the Development of a Life Annuity Market in Australia John Evans and Michael Sherris Australian School of Business University.
1 Ins301 Chp15 –Part1 Life Insurance and Annuities Terminology Types of life insurance products Tax treatment of life insurance Term insurance Endowment.
Timothy C. Pfeifer, FSA, MAAA Pfeifer Advisory LLC November 13, 2014.
This material is for Institutional / Broker-Dealer use only. Not for distribution or use with the public. John Hancock’s Indexed UL Portfolio MLINY
sOA Life & Annuity Symposium Session 45: Life Product Trends Timothy C. Pfeifer, FSA, MAAA Pfeifer Advisory LLC May 17, 2016.
MEMBERS Horizon – The Value of Risk Control
Fixed Income INCOME OPTIMIZATION.
EXPLORING THE OPTIONS OF ASSET-BASED LTC
Asset Based Long-Term Care
Tax Advantaged Distribution Strategy
2009 NAVA Marketing Conference
Indexed Annuity Withdrawal Benefits
Principal Select Series AnnuitySM
Session 131PD: Life Updates & Trends
Current Assumption Whole Life (CAWL)
LIMRA 2017 Retirement Industry Conference
ASSET-BASED LTC A CLIENT-FRIENDLY OPTION
2014 Society of Actuaries Annual Meeting & Exhibit
The Secure Lifetime GUL 3 Story
Annuity Training MJ.
IUL Accumulation Everyone loves a good accumulation story.
Practical Case Studies in Annuity Planning
4 Steps to Successful Selling
Practical Case Studies in Annuity Planning
Presentation transcript:

Timothy C. Pfeifer, FSA, MAAA Pfeifer Advisory LLC May 21, 2012

2 I. Declared Rate Fixed Deferred Annuities II. Fixed Indexed Annuities III. Single Premium Immediate Annuities IV. Deferred Income Annuities

3 18% of DRFDA sales were in products with MVAs It should be noted that a quarter of indexed annuity sales are directed to declared rate accounts Banks and S&Ls sold 54% of non- MVA fixed and 22% of MVAs Combined MVA and non-MVA sales ($34B) in 2011 lowest in last ten years Lower compensation Eliminate automatic ROP Cut renewal credits to minimums First year bonuses Invest in longer durations Prevalent reactions to low interest rate environment: Over half (58%) of non-MVA fixed sales in 2011 involved IGPs of more than one year (3- and 5-year dominate)

4 Average industry crediting rate about 2.8% for last six months Heaped surrender charges (1 st year SC% >> years of SC) RULE of THUMB: 1% surrender charge in one year worth one basis point Heaped surrender charges (1 st year SC% >> years of SC) RULE of THUMB: 1% surrender charge in one year worth one basis point Greater use of limited market value adjustments (reserve and capital relief) Some increased use of Bailout Provisions Limited number of LTC Rider provisions – modest sales

5 Part 1 Approximately 45% market share last two years 7% from banks in 2011 Little securities regulation chatter Focus is on income sale (GLWB with attractive BB roll-ups) Caps/Participation rates fallen to weak levels (e.g., caps of 3%) Commissions down slightly, but still on high-end Focus on simple crediting approaches and S&P index due to options budgets Current Profile: The Strong Sector of the Fixed Annuity Market

6 Part 2 For the first time, specific guidance on illustrating FIA returns Backcasting based on ten-year period (last 10, best 10 out of 20, worst 10 out of 20) New indexes may not be illustrated State adoptions NAIC Annuity Disclosure Model Death benefit enrichment, including DFD treatment Enhanced guaranteed income under GLWB for LTC, etc. Uncapped designs are of significant interest Binary/Performance Trigger for banks, simple sale Strong Design Creativity Key Elements in the Indexed Annuity World

7 Part 3 The Future of FIAs Indexed SPIAs (finally!) More efficient hedging/option budget Lower average compensation More multi-year terms All of this assumes a continued low interest rate environment

8 Sales reached $7.7B in 2011 Sales up 9% over carriers wrote >$100 Million Continued growth and traction, despite low interest rates Favorable demographics Education of reps, customers Appealing ALM Favorable strain characteristics Drivers of Sales Capital burden on SPIAs Expenses allocated to SPIAs Liquidity features What Differentiates Carriers? Still very price driven, commodity-like business

9 One main character success story: Captive producers, large SPIA player Four other carriers in market: Little success, little effort (in some cases) Better attempts at packaging as part of complete retirement plan, evaluate on “full IRR” basics, incorporating survivorship benefits Future: WHY? So far, More Smoke Than Fire Low rates Inadequate liquidity Learning curve in how to package, sell

Timothy C. Pfeifer, FSA, MAAA