Guarantee’s in Variable Annuities could come back to bite some Large Insurer’s

By | April 6, 2009
Well the hits just keep on coming don’t they! Many Brokers and Agents are wary of some of the large life carriers that have underwritten some of the Variable Annuities with guarantees. I know many life insurance carriers have readjusted there balance sheets, cut cost’s and laid off many employees to stave off panic from brokers and clients. The question remains though will it be enough? Only time will tell, but I do believe so!
clipped from online.wsj.com
Brokers Fear Many Insurers
Are Ignorant of Annuity Risks

More than 70% of financial advisers in a recent survey said they were concerned about the risks insurers have taken on with guaranteed-minimum variable annuities — and nearly a third said they doubted the insurers themselves understood those risks.

These are among the key findings of the fourth annual survey of Merrill Lynch advisers, conducted in February by analysts at what is now Banc of America Securities-Merrill Lynch, a unit of Bank of America Corp. Merrill has long been one of the largest distributors of retirement-income products.

Big players that have suspended sales of certain guarantees, reduced benefit levels or made other changes to reduce their risk include units of Allianz and AXA, as well as Fidelity Investments and Pacific Life Insurance Co.
MetLife displaced American International Group Inc., whose near-collapse last September prompted the biggest single bailout effort by the U.S. government.
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