Some of the same US entities that generated the highest growth rates in life, annuity and accident and health direct premiums and considerations in 2021 may be poised to generate above-market expansion rates again in 2022.


The list of fastest-growing US life insurers in 2021, as determined by various criteria set by S&P Global Market Intelligence, was dominated by groups and independent entities focused on the pension business as a draw on sales of certain types of annuities in the middle of Market volatility, distributor disruptions and extremely low interest rates that were maintained after the declaration of a pandemic in March 2020 made comparisons easy. While premium volume in the business line jumped 14.8% in 2021, including first-year premiums, single premiums and renewals, the growth rate was only 9% above the pre-pandemic 2019 ratio. Although 2022 got off to a relatively slow start, multiple federal funds rate hikes from March through July have helped boost sales to record levels.

In developing our projection for industry-wide growth in ordinary individual annuity premiums and considerations of nearly 8.9% in 2022, we anticipate more of the same as particularly favorable market conditions for annuity products that offer consumers interest rates attractive and key protection are about to generate particularly strong growth. Our projected growth rate for the annuity business, in general, compares quite favorably to other lines.

Pension writers perform better

Investors Heritage Life Insurance Co . ranked as the fastest-growing company in the sector in 2021 based on growth greater than 500% in both total direct premiums and considerations, as well as first-year direct premiums and single premiums, a new measure of production of business. Annuity-focused entities, including Heritage Investors, grabbed seven of the top 10 positions in each of the two categories.

Our rankings include US group life and top-tier life entities that meet the following criteria: 1) 2020 premiums and direct considerations, net premiums and considerations, and first and only year direct premiums of at least 1 million dollars, each; 2) 2021 direct increase of premiums and considerations of at least 25%; 3) 2021 direct increase in first and only year premiums of at least 25%; and 4) 2021 increase of at least 15% in premiums and net considerations. The criteria are intended to ensure that the ranking includes entities that are writing new business and retain at least some of their production.

Frankfort, Ky.-based Heritage Investors. cited the launch of its indexed fixed annuity product in April 2021 and, to a lesser extent, sales of multi-year guaranteed annuities and products needed for its large growth. The rapid expansion continued in the first quarter of 2022 as the company’s premiums and considerations rose to $125.6 million from $37.9 million in the year-ago period.

Comparisons become much more challenging for the company through the balance of 2022, but market dynamics appear to be significantly more supportive of sales growth for various types of deferred and indexed fixed rate annuities. In addition, Investors Heritage recently introduced a new fixed indexed annuity product that offers fully guaranteed participation rates in indexed accounts during the surrender charge period and guarantees that policyholders will not lose account value when performance of the market is negative.

Heritage Investors’ first-year direct premiums and single premiums fell 76.4% in 2020 after the company cut lending rates at the start of the pandemic in light of economic uncertainty. Its volumes for 2021 were still up 73.8% from 2019.

The pattern of a large increase in 2021 after a significant decline in 2020 in first-year and single premiums was not unique among our fastest-growing insurers, although not to the extremes shown by Investors Heritage. The third- and fourth-fastest-growing first-year and single premium insurers showed double-digit declines in 2020 followed by double-digit expansion in 2021.

American National Group Inc. experienced an increase in capital-indexed deferred annuity premiums and deposits received, with its 2021 total in that category exceeding the combined amount for 2019 and 2020. Deferred annuity fixed premiums and deposits, meanwhile, were approached the company’s volume in 2019.

Liberty Bankers Life Insurance Co. fixed annuity writer. attributed its 2021 momentum to a combination of improved lending rates and an improved financial strength rating. Liberty Bankers Life Group also benefited from higher volumes in its relatively smaller life and health businesses.

Strong sales in volatile times

Second quarter statutory data is not yet available, but we would anticipate a wide spread in pension providers’ growth rates, based in large part on the types of products they emphasize.

Survey data published by LIMRA’s Secure Retirement Institute shows that US annuity sales rose 9% in the first half of 2022 and 14% in the second quarter, following a tremendous increase in deferred products. fixed rate more than offset the significant weakness in traditional variable annuity production. Fixed-rate deferred annuity sales rose 44% in the first half of 2022 and 76% in the second quarter. Fixed indexed annuity sales were up 20% and 19% in the respective periods.

Public company earnings reports seem to echo these trends.

Lincoln National Corp., a major writer of variable annuities, reported a 15.8% drop in total second-quarter annuity sales. On the other side of the spectrum, Athene Holding Ltd. posted “record” quarterly flows and a doubling of applications in its annuity-focused indexed fixed retail channel during the second quarter, according to parent Apollo Global Management Inc.’s earnings report.

The top five sellers of deferred fixed-rate annuities in the first quarter of 2022, according to the Secure Retirement Institute, were the group led by New York Life Insurance Co., American Life units of American International Group Inc., the group led by by Massachusetts Mutual Life Insurance Co., USAA Life Insurance Co. and Western & Southern Financial Group Inc. Global Atlantic Financial Group Ltd., which ranked sixth, benefited from what the CFO of KKR & Co. described. Inc. Robert Lewin during an August 2 conference call as a “fairly soft environment” for annuity sales, with about $6 billion in total inflows.

In the fixed indexed annuity business, the top five sellers in the first quarter of 2022 according to the Secure Retirement Index were Athene’s US life units, followed by Allianz Life Insurance Co. of North America, AIG, Sammons Enterprises Inc. Life ESOT companies and Fidelity & Guaranty Life Insurance Co. (Notably, F&G Life’s indexed annuity sales fell slightly year over year in the second quarter of 2022 to $1.11 billion from $1.14 billion, according to parent Fidelity National Financial Inc., but its MYGA production doubled to $1.09 billion dollars.)

Athena experienced growth in direct writing in both its individual and group annuity businesses in 2021, but the latter is a result of its annuity risk transfer offerings. Its US life subsidiaries placed behind only Investors Heritage on our list of the fastest-growing entities in 2021 based on total direct premiums and consideration, and it ranked 7th by direct premium growth in the year first and only ones.

Overall annuity sales are up 16% in 2021, according to the Secure Retirement Institute. In contrast to the trend in Q2 2022, traditional variable annuities and registered index-linked annuities led the way against significantly different macroeconomic and capital markets backdrops.

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.

By admin

Leave a Reply

Your email address will not be published. Required fields are marked *