An interesting paper (click here to read) from a a Milliman consultant on asset / portfolio management (from the insurance company's perspective) for annuities.

The focus is naturally on fixed deferred annuities.

Additional focus of course is on managing a fixed income portfolio.

An interesting point and essentially the author's cardinal rule:

Make sure that product sales are large enough to suitably cover fixed administrative costs but not so large that they outstrip investment supply lines.

Further, the author states:

In offering annuities, insurers act as intermediaries between the capital markets and the insurance markets, hammering bonds into annuities. Achieving congruence between the size of the insurer’s product-sales and asset-gathering organizations helps ensure its ability to enjoy a long-lasting and enjoyable presence in the annuity marketplace.

An interesting article and worth taking some time to read.