Report on Life and Annuity Living Benefit Riders: Considerations for Insurers and Reinsurers

The Reinsurance Section, Product Development Section and the Committee on Life Insurance Research announce the release of a new report that investigates life and annuity living benefit riders and their implications from both a direct writer and a reinsurer perspective

Life & Annuity Symposium Presentations (SOA)

Presentations from the Life & Annuity Symposium held May 4-5, 2015 in New York City are now posted at the SOA website.

The Retirement Challenge (LOMA Resource)

One of the most promising markets in the life insurance and annuity industry is the retirement market. It is top of mind in the C-suite, within government, and among both pre- and current retirees. At the heart of this business opportunity is the question of retirement security. What products and services can insurers offer to help their customers achieve it?

The Top 5 Priorities for Life Insurers in 2015

In coming years, expect to see more simplified and consumer-friendly products, including annuities tailored to young workers looking to build a nest egg. Life insurers’ back-office operations will also be better integrated, availing advisors of more cross-selling opportunities across product lines.

2015 Life Insurance and Annuity Industry Outlook (Deloitte)

In many ways, the life insurance and annuities industry is on more solid footing entering 2015 than it has been for quite some time. Economic growth is improving and the unemployment rate is steadily falling, which should create a more conducive environment for carriers to market their products and services.

But fundamental challenges — some new, some ongoing — are keeping industry executives on their toes.

2015 EY US Life-Annuity Insurance Outlook

Prospects are generally upbeat in 2015 for providers of life insurance and annuities in the US. Insurers can expect to build upon recent improvements in annuity sales, as credit rates continue to increase and customers return to simplified, tax-deferred products. Life insurance sales will benefit from rising levels of consumer confidence and personal wealth, both driven by the ongoing economic recovery and expectations for gradual increases in interest rates.

Modeling of Policyholder Behavior for Life Insurance and Annuity Products A Survey and Literature Review

The Financial Reporting Section and Committee on Life Insurance Research announce the release of a new report examining current practice around the development of policyholder behavior assumptions for life insurance and annuity products.

An Annuity Renaissance

Once scorned by the investing public, annuities of all types are gaining favor with advisors as an important piece in the retirement income puzzle.

Carriers Eye Simpler Products in 2014

Financial advisors can anticipate that life and annuity carriers in 2014 will develop simpler products for consumers, and will develop new products targeting underpenetrated market segments like Generation X, according to a new report from the Deloitte Center for Financial Services.

Annuities: 4 Predictions for 2014

Will annuity sales continue their upward track in 2014? How will an uptick in interest rates impact insurers? What’s brewing on the regulatory front?

2014 Life Insurance and Annuity Industry Outlook (Deloitte)

Life insurers and annuity writers may gain some sales traction in the year ahead thanks to modest economic growth, declining unemployment, and the possibility of an uptick in interest rates. And yet many have begun to realize to sustain growth over the long term, fundamental changes in their business models are necessary in the near term.

2014 Ernst & Young US Life Insurance - Annuity Outlook

In 2014, rising interest rates, the ongoing economic recovery, and the improving employment and housing markets should boost consumer confidence and personal wealth, creating greater sales opportunities for life insurers.

Digital or Analog? Life Insurers Have to Do Both

U.S. life and annuity carriers, which have spent the past several years reducing risk exposures, repricing products and rebuilding their capital base, are well positioned for 2014. Now another challenge comes knocking: marketplace bifurcation.

Life And Annuity Carriers Sign Off On Electronic Signatures

For life and annuity carriers, the era of electronic signatures is at hand. Agents and carriers have come around to the advantages of signing on the dotted line in electronic form, particularly when it comes to new business.

Predictive Modeling Applications for Life and Annuity Pricing and Underwriting

The session will begin with a review of the predictive modeling tools that will be discussed, followed by the application of the tools to specific situations as examples. The session will provide guidance for when predictive modeling tools can be effectively used and when they cannot.

Blueprint for Success - Life and Annuity Process Re-engineering through Technology Innovation

Join this panel of thought leaders as they explore the advantages of defining a blueprint for success for process re-engineering. The conversation will touch on what is currently happening in the market today; focusing on the importance of and benefits provided by straight-through-processing (STP), rules engines, workflow and case management, and automated underwriting solutions. Including a case study, this session will outline the critical success factors of a leading carrier’s incremental implementation of these technologies; resulting in empowered agents and underwriters and accelerated growth.

Perspectives on Life Insurance and Annuities in the Middle Market

In 2012, the Marketing & Distribution Section launched a multi-phase study to better understand the middle income market for life insurance and to identify segments, based on buyers' attitudes, that would allow the industry to better target customers. Specifically, this session will highlight the "Opportunist," "Planners" and "Protectionist” segments established in phase 1 of the research and give some insight into phase 2. The stage will also be set for further analysis regarding the middle income market potential for annuities. What are the biggest hurdles to penetrating this market? Has the middle market been left behind in the pursuit of high-net-worth clients, or has the middle market turned its back to annuities in the wake of the financial crisis?

Investing for Advantage: Life & Annuity Technology Plans

Many leading insurers are rethinking their products, distribution, and value proposition to customers. IT has a key role to play as insurers make changes across the value chain to address the current environment and capitalize on new opportunities.

A Survey of Actuarial Modeling Controls in the Context of a Model-Based Valuation Framework (SOA)

As the life insurance and annuity industries move toward model-based approaches to reserve and capital valuation (MBV), actuarial models are increasing in complexity and sophistication while the imperative to avoid modeling errors is also increasing. In the new environment, the high reliance that companies and regulatory agencies will place on model results will require a well developed and maintained control system to assure the quality of all models and supporting processes.

2013 US Life-Annuity Insurance Outlook

The US life insurance industry is confronting significant demographic, macroeconomic and regulatory challenges to business models and operations. In 2013, successful players are repositioning and reinventing their products, strategies and services, positioning their companies for growth and profitability in the competitive, lower-margin market.

Five Trends to Watch in Annuities

The economy is forcing insurance companies to revamp annuity products, features and investment options during the remainder of 2012 and into 2013.

Life and Annuity Process Re-engineering through Technology Innovation (2012 ACORD LOMA)

The conversation will touch on what is currently happening in the market today; focusing on the importance of and benefits provided by straight-through-processing (STP), rules engines, workflow and case management, and automated underwriting solutions. Including a case study, this session will outline the critical success factors of a leading carrier’s incremental implementation of these technologies; resulting in empowered agents and underwriters and accelerated growth.

STP and Product Development: Lessons Learned

Celent facilitated another Insurer Peer Networking Event at the headquarters of New York Life Insurance Company. The discussion was the liveliest yet, with every company contributing significant learnings about their experience in straight-through processing (STP) and product development in life and annuity insurance.

Great Expectations - Industry Insights to Annuities

By the end of 2011, annuities had continued their reign as the single largest segment of the life and health industry, amounting for nearly half of all revenue.

Mortality Comparison and Risk Exposures in the Older Age US Financial Services Market

The Society of Actuaries (SOA) has undertaken research to uncover the differences in mortality expectations between life insurance, annuity and pension products at older issue ages, and to increase awareness of potential impacts that these differences may have on managing the risk assumed for various financial services products in the United States.

Retirement Anxiety Inspires Rush of New Annuities

Recent annuity product rollouts are putting the spotlight on retirement income strategies as opposed to the how-much-you-can-accumulate focus of yesteryear - and advisors are of two minds about that.

Innovation, Competition Key to New Annuity Universe

Advances in products and new entrants into the annuity space threaten to shake up the industry. And that’s not necessarily a bad thing.

For Annuities, Innovate or Vacate

Discussion with Dana Pederson on trends within the annuity industry.

A Long Tail, Getting Longer

I was a bit surprised when I checked out industry data from the Insurance Information Institute earlier this year that had pegged industry earnings for 2010, because for the first time that I can remember, life insurance became the smallest sector in this business. Annuities came in with nearly half of total industry revenue, health insurance came in at just over a quarter, and life insurance picked up the rest, as just under a quarter.

LIMRA Study: Over A Third of Retirees Receive Income from Annuities

According to a recent LIMRA study, 35 percent of all retirees receives income from an annuity in retirement.

Annuity Sales Up Again Despite Lower Rates

Second quarter 2011 fixed annuity sales overcame falling interest rates to post their second consecutive quarter-to-quarter increase.

Variable Annuity Dynamic Lapse Study: A Data Mining Approach

Dynamic lapse behavior is an important factor in variable annuity (VA) pricing and valuation. A company can regularly collect lapse data to form the basis for data mining, which can lead to fundamental insights on policy lapse behavior.

This paper describes the principles of data mining, using a realistic illustrative example, and explores the issues of data credibility, relevance, and formula fitting.

SOA Life & Annuity Symposium Presentations

Presentations from various sessions at the SOA Life & Annuity Symposium held in May 2011 in New Orleans, LA.

ACLI Life Insurers Fact Book 2010

The 2010 Fact Book provides statistics and information on trends in the life insurance industry. Specific topics covered include assets, liabilities, income, expenditures, reinsurance, life insurance, and annuities.

NAIC Bulletin on Stranger-Originated Annuities May Lead to New Penalties

State insurance regulators are cracking down on stranger-originated annuity (STOA) transactions, and it could affect your annuities business. You will see stricter compliance procedures and could face reduced commissions—regardless of whether you’re knowingly selling annuities as part of a STOA scheme.

These changes will trickle down from the National Association of Insurance Commissioners’ (NAIC) Life Insurance and Annuities Committee, which approved a model bulletin on STOA on March 27. Although state insurance regulators aren’t required to adopt the bulletin, many certainly will distribute the bulletin to carriers operating in their jurisdiction.

Implications of Actuarial Guideline 43 for variable annuity product design and risk management

Companies have now had several financial reporting cycles since the establishment of Actuarial Guideline XLIII (AG 43) in December 2009. Milliman's survey of the AG 43 implementation process for U.S. variable annuity companies shows a range of different implementation practices under the new statutory reserving requirement. This paper focuses largely on the product design and risk management implications of AG 43.

Testimony Rips Into Stranger-originated Annuities in Different Ways

Stranger-originated annuity transactions (STATs) have stirred up the ire of professionals in the life settlement and life insurance businesses as well as from the fixed and variable annuity businesses, broker-dealers and more.

Sustainable Manufacturing of Variable Annuities

The variable annuity (VA) industry is undergoing a transformation in response to the global financial crisis. VA products with their associated guaranteed living benefits are in high demand as the Baby Boomers transition into retirement. VAs provide customers with the ability to participate in a diversified portfolio of investments with protection against severe, sustained declines in the market. However, it is not clear that the life insurance industry can continue to offer VAs without fundamentally changing the manufacturing process for the creation and management of variable annuities. This article highlights the need for a new approach to VAs, the Sustainable Manufacturing Model, and illustrates the basic components of the process. Milliman is actively working with life insurers, asset managers, and distributors to implement this new model.

Stranger-Originated Annuities: It’s About More Than Annuities

The battle over stranger-originated annuities is part of a larger battle over the insurance product resale market, representatives from an insurer group and a life settlement group agree.

Witnesses from the American Council of Life Insurers, Washington, and the Life Insurance Settlement Association, Orlando, Fla., appeared Thursday at a STOA hearing organized by the Life Insurance & Annuities Committee at the National Association of Insurance Commissioners.

Risk Management Practice in Insurance Companies and Banks for Variable Annuities

Presentation from the SOA 2010 Life & Annuity Symposium, May 17-18, 2010.

Regulator Group Moves To Reign In Secondary Market For Annuities

The Interstate Insurance Product Regulation Commission's product standard committee voted Feb. 22, 2009 in favor of a standard that would allow annuity carriers to terminate the living benefit of a contract upon a change of the contract’s ownership.

Milliman: Korean Variable Annuities Market

Although the Korean variable annuities market has grown rapidly over the last five years and is fairly sophisticated in terms of product development, it is still lacking from a risk management perspective. Dynamic hedging is one of the best risk management strategies that Korean VA writers can adopt.

Real World Index Annuity Returns

The Wharton Financial Institutions Center offers the first empirical exploration of fixed indexed annuity returns based upon actual
contracts that were sold and actual interest that was credited.

Regulator Group Moves To Reign In Secondary Market For Annuities

Life insurers and life settlement professionals are taking opposite sides over a model state regulation that would let deferred annuity carriers terminate a living or death benefit if a policy owner sells the annuity in the secondary market.

Actuary Reviews Illustration Proposal

Insurers that try to illustrate annuity performance graphically should provide at least 2 standard illustrations, veteran actuary Steven Ostlund of the Alabama DOI has recommended in a comment letter submitted to the NAIC's Annuity Disclosures Working Group.

Milliman: Combo LTC annuities: Here they come

The Pension Protection Act of 2006 included some key provisions that addressed for the first time the taxation of combination annuity plans featuring long-term care insurance (LTCI). The rules apply only to nonqualified annuities coupled with tax-qualified long-term care riders.

Replicating Portfolios With Variable Annuity Hedging

The European life insurance market has recently shown great interest in unit-linked products with investment guarantees (ULGs), commonly referred to in the U.S. and Canada as variable annuities.

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