5 New Things a Top Analyst Is Seeing in the Annuity Market Now

Keefe, Bruette & Woods recently tried to pull insurance investors out of the COVID-19 work-at-home fog by holding a virtual insurance conference.

The investment bank — which has its headquarters in the old Equitable Building in Midtown Manhattan — brought executives from 14 big, publicly traded life insurers in to talk about what they’re doing and seeing now.

Ryan Krueger, a KBW analyst, found some comments that anyone watching the annuity market might expect.

“Low interest rates, social distancing, and weak economic conditions are still causing headwinds for many products,” Krueger said.

Resources

• A copy of Ryan Krueger’s report is available, behind a paywall, here.
• An article about how one annuity issuer saw the second quarter is available here.

Krueger also found potentially spooky gaps in what life insurer executives were talking about: Few of the conference participants said much about interest rates. And “there wasn’t a lot of specific commentaries by companies ahead of [second half of the year] actuarial assumptions reviews.”

The speakers did talk about some new things. Here’s a look at five of those new things, drawn from Krueger’s conference report.

1. Sales are doing better.

Although outside forces are causing new business headwinds, “companies commented that conditions are gradually improving and persistency has largely held up (and in some cases improved),” Krueger writes.

2. Athene is out here absorbing fixed annuity risk.

Athene is known for acquiring jumbo blocks of business, but it said it’s now working on a lot of deals for blocks of business in the $1 billion to $2 billion asset range.

For retail agents, annuity reinsurance deals might not mean anything. In some cases, however, they could lead to administrative changes, and the administrative changes could lead to the annuity holders seeking advice from financial professionals.