MetLife Inc., the insurer reducing variable annuity sales by more than half, said rivals that are expanding are probably retaining less funds to back the retirement products.
“The companies that hold the lowest amount of capital against their VA business are by and large the same companies who are most aggressively selling VAs today,” Bill Wheeler, MetLife's president of the Americas region, said at a conference on Tuesday. The sales expansion is “literally a doubling-down in this industry,” he said.
MetLife, the largest U.S. life insurer, has been scaling back from variable annuities to cut risks tied to market fluctuations. The contracts can guarantee that clients' assets will increase in value even when equities fall. Prudential Plc's Jackson National, the No. 12 seller of variable annuities in 2007, is now the biggest, followed by Lincoln National Corp.
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Rivals “clearly have a different view about their risk profile, and the risk profile of the VA business,” Mr. Wheeler said without naming firms.
Mr. Wheeler, who was chief financial officer at New York-based MetLife until 201
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