Credit Risk

Some of the world's largest asset managers are working on development of fund offerings that include features such as income guarantees or principal protection. In contrast to standalone living benefits, the new products would actually be embedded into a mutual fund offering. Firms such as Pimco, Russell Investments and John Hancock have expressed strong interest in and are actively developing such offerings. The availability of lower cost insurance features and regulatory complexities are...

Officials from the Departments of Treasury and Labor want annuities to be a default option for workers who participate in employer-sponsored retirement plans such as 401ks. At a recent industry conference, Treasury senior advisor Mark Iwry spoke of creating annuity -based lifetime income options within the defined contribution 401k arena. Issues such as credit risk and portability continue to present obstacles to progress. Employer fiduciary liability with respect to in-plan annuity selection...

MetLife 's leading position in the U.S. annuity industry is only getting stronger. The company is benefitting from financial crisis-related flight to quality. In other words, financial advisors and customers who are concerned about credit risk are migrating to a handful of the strongest insurers. MetLife expects variable annuity sales to exceed $15 billion in 2009--exceeding pre-financial crisis revenue levels in 2007. The company has also seen an increase in fixed annuity business. Source:...