The third quarter saw the continued enhancement of features available on variable annuities (VAs), according to a report by Ernst & Young. The Hartford and RiverSource both issued new VAs during the third quarter and Met Life, RiverSource and Transamerica introduced new living benefits on existing products.
Meanwhile, other companies—including Axa, Integrity, John Hancock, Nationwide, Pacific Life, Penn Mutual and Sun Life—filed VA prospectuses, indicated that there’s more to come.
“Companies pulled back their riders and features,” immediately after the crash in November 2008, “but in the past nine months they’ve been coming out with new living benefits and VAs,” said Gerry Murtagh, a product manager in Ernst & Young’s retirement income group.
VA buyers opt for guaranteed-living-benefit riders 87% of the time, and with sales up 18% to $20.3 billion in the second quarter, according to LIMRA figures, it’s clear that investors want the bells and whistles. “They’re more expensive, but some of the top players have these living benefits,” Murtagh said. “Some companies came out with simpler annuities but they didn’t do as well as expected. Others made a conscious decision to grow their market share by coming out with features that policy owners would want.”