Latest: Fixed indexed annuities grow by 25% YoY, Rilas up 6%

According to Limra’s 2022 Individual Annuity Sales Survey, total 2022 annuity sales increased 23% over 2021 results and were 18% higher than the previous record of US$265 billion set in 2008.

The interest rate dip in December spurred investor demand looking to lock in the favorable rates before they dropped further - Todd Giesing, Limra

‘The interest rate dip in December spurred investor demand looking to lock in the favorable rates before they dropped further,’ said Todd Giesing (pictured), assistant vice president, Limra Annuity Research.

In the fourth quarter, bank sales more than doubled (117%) to US$21.8 billion. In 2022, bank sales were a record US$73.7 billion, 69% higher than in 2021. This is the first-time banks have led total annuity sales since 2004, accounting for 24% of the US annuity market in 2022, according to Limra.

Fixed indexed annuity (FIA) sales also had a record quarter and year. In the fourth quarter, FIA sales were US$22.3 billion, a 34% increase from the prior record set in the fourth quarter 2021. For the year, FIA sales were US$79.8 billion, up 25% from 2021, and 9% higher than the record set in 2019.  

Registered index-linked annuity (Rila) sales were US$10.1 billion in the fourth quarter, down 2% from the fourth quarter 2021. Despite lower fourth-quarter results, total Rila sales reached US$41.1 billion in 2022, six percent higher than prior year and a new all-time high for the product line’s sales.  

Traditional variable annuity (VA) sales continued their downward trend. In the fourth quarter, traditional VA sales fell 41% to US$12.7 billion. In 2022, traditional VA sales totaled US$61.8 billion, down 29% from 2021 results.

KGI Asia Sage goes the Extramile

Hong Kong-based fintech Goldhorse Capital Management has announced that KGI Asia has onboarded its Extramile structured products platform as it seeks to ‘strengthen its provision of structured products and wealth management solutions’.

KGI Asia said the use of Goldhorse’s Extramile platform will enable its advisors to combine bespoke services and investment insights to provide clients in Asia with wealth management solutions with ‘the ability to offer unrivalled structured products solutions based on clients' need anytime, anywhere’.

‘KGI Asia is committed to providing better wealth management services to our clients, and structured products is an important part of our wealth management portfolio,’ said Kevin Tai, head of International Wealth Management of KGI Asia.

‘This partnership with KGI Asia is another important vote of confidence by leaders in the private wealth management eco-system in APAC, in our innovation as well as the value of the Extramile Community,’ said Long Lee (right), chief executive officer of Goldhorse Capital.

Offshore pension provider facilitates use of structured investments in new ‘low cost’ product

Guernsey-based international retirement and pension solutions provider Overseas Trust and Pension (OTAP) has launched Select, a new ‘low-cost and low entry’ product aimed at offering a range of benefits to investors, including ‘wealth accumulation, income, asset protection, global portability, succession planning and tax efficiency’.

The product also facilitates the use of structured investments, said Rex Cowley (right), director and co-founder of OTAP.

‘There is a growing market demand for access to international retirement products from clients who want to protect and consolidate existing assets,’ he said. ‘Many of these clients have been excluded from accessing appropriate international products due to cost or entry criteria.’

The product gives offshore investors entry at £50,000 (US$59,521, €56,283) into OTAP’s pension, retirement, preservation, and trust products, including qualified non-UK pension scheme.

The Select annual fees start at £495 per year and it provides advisers with access to a range of investment platforms, including an offshore bond, offering open architecture investment and multi-currency options.

US insurer adds structured outcome investments with an ‘active approach’

Annuity provider Corebridge Financial has added two hedged equity funds to its Advanced Outcomes Annuity, a variable annuity that includes structured outcome investments.

The new hedged equity funds from Milliman Financial Risk Management (Milliman FRM), Milliman-Capital Group Hedged U.S. Growth Fund and Milliman-Capital Group Hedged U.S. Income and Growth Fund, are structured outcome funds that take an active approach to achive returns while seeking to limit downside market exposure.

The funds are based on a portfolio of securities using an options overlay designed for quarterly resets. The ‘capture-reset-reinvest’ capability is part of each Advanced Outcomes Annuity and was designed to give financial professionals and investors ‘the opportunity to capture investment gains, refresh upside potential and downside protection, and reinvest in a new strategy with a different targeted outcome’, according to Bryan Pinsky (right), president of individual retirement at Corebridge Financial.

A recent Greenwald Research survey commissioned by Corebridge revealed that financial professionals want to invest in protection with the potential for upside growth. Amid stock market volatility and interest rate increases, 4 in 10 financial professionals reported they are increasingly using structured solutions that offer targeted downside protection.

‘In this challenging investment environment, financial professionals want to capture growth through equities but are wary of market declines,’ said Adam Schenck, Principal, Managing Director and Head of Fund Services, Milliman Financial Risk Management.

In addition to the new hedged equity funds, Advanced Outcomes Annuity recently added a trigger strategy to the structured outcome funds managed by Milliman FRM. The trigger strategy targets predefined growth when the referenced index performance is either flat or positive and provides targeted downside protection using a buffer against market losses over the six-month fund term.

India’s first sovereign green bond indices launched

The National Stock Exchanges (NSE’s) index services subsidiary, NSE Indices, has launched India’s first ever sovereign green bond indices.

The new indices - Nifty India Sovereign Green Bond Jan 2028 Index and Nifty India Sovereign Green Bond Jan 2033 Index, follow the target maturity date structure.

The Nifty India Sovereign Green Bond Jan 2028 Index has a maturity date of 31January 2028. And includes Government securities (G-Secs) issued under the category of sovereign green bonds (SGrBs) maturing during the six-month period ending January 2028. The Nifty India Sovereign Green Bond Jan 2033 index, on the other hand, has a maturity date of 31 January 2033 and tracks G-Secs issued under the category of SGrBs maturing during the 12-month period ending January 2033.

The indices seek to capture the performance of Indian sovereign green bonds that finance green infrastructure, said Mukesh Agarwal (right), CEO, NSE Indices.

‘These indices are expected to act as a benchmark for asset managers and be a reference index tracked by passive funds in form of exchange-traded funds (ETFs), index funds and structured products, which can provide fixed income investors efficient and cost-effective access to the Indian sovereign green bond market while making a positive impact on the society,’ he said.

Both indices have base date of January 27, 2023, and a base value of 1,000. The indices will be reviewed monthly.