AIG unit re-enters indexed-annuity market
By Darla Mercado
July 20, 2010 12:44 pm ET
Western National Life Insurance Co., jumped back into the indexed-annuity market last week after more than 18 months on the sidelines.
The subsidiary of American International Group Inc. stopped selling equity-indexed annuities in late 2008. At the time many insurers were curbing sales of the products in order to build up capital. But a banner 2009 for indexed-annuity sales has forced Western National to reconsider its strategy.
Last week, the firm relaunched its Power Index Annuity, a traditional indexed annuity.
“We felt that re-entering the market would be a great way to diversify our product offerings,” said Western National Life spokeswoman Linda Skolnick. “Our goal is to build sales to a level where Western National is a top five index annuity distributor in the bank channel.”
That’s an ambitious goal considering that at the end of 2007 the insurer, then known as AIG Annuity, was in 19th place among sellers of indexed annuities, according to data from AnnuitySpecs.com.
But the carrier may get a boost in sales thanks to a regulatory action: Last week, the U.S. Court of Appeals for the District of Columbia Circuit chose to vacate a rule that would have placed indexed annuities under the Securities and Exchange Commission’s jurisdiction.
Sales of indexed annuities should rise, now that it’s clear they will be treated as fixed insurance products, said Sheryl J. Moore, president of Advantage Group Associates Inc. and AnnuitySpecs.com.
“Many people who sell indexed annuities in banks are registered representatives, and with the securities status of indexed annuities in question, they didn’t want anything to do with it until they knew,” she said.
Some $30.2 billion in indexed annuities were sold during 2009, up $3.5 billion year-over-year, according to Beacon Research Publications Inc. Sales in this year’s first quarter, however, were $6.7 billion, a decline of 5% from the year-earlier period.
Originally Posted at Investment News on July 20, 2010 by Darla Mercado.
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Friday, Dec 24
2010
jnuey
why would anyone want to buy or sell an AIG product. the company who helped bundle risky product to crush our economy. Rebranded this unit because the company is TRASH
Monday, Dec 27
2010
Sheryl J. Moore
Untrue, Jnuey. The insurance subsidiaries of AIG never were in financial trouble. It was smart of the insurance companies to rebrand and get rid of the negative stigma that American’s associated with the name ‘AIG,’ as the negative media inaccurately reported that the insurance subsidiaries were problematic. sjm