Total third-quarter 2011 sales of indexed annuities in
The third-quarter sales volume was second only to the same quarter a year ago, said
Allianz Life Insurance Company of
Speaking during a recent
The past three years since the market's collapse have been particularly challenging for annuity writers. "I have never seen more changes to annuity products in my life than in the past year in particular, whether the annuity is fixed, indexed, or variable," Moore said.
In 2010, the life insurance industry had about 8% of its bond portfolio invested in U.S. Treasuries, according to Conning. Treasuries and corporate bonds are based off the Federal Reserve funds' rate, and new issues of Treasuries are based off this rate, plus inflation, according to LIMRA.
In September, the Federal Reserve's latest move to spur economic activity in
The "plan is to push long-term rates down to spur economic activity," said
A low-interest rate environment generally refers to the 10-year Treasury note, according to
"If you think of a low interest rate environment as a period of time when investment spread pressure became a concern, 10-year T-note yields really began to decline at the beginning of the century and bottomed out in late 2003, around when spread pressure first became a concern," Schwartz said in an email on
The industry "got a reprieve after that but yields again began sliding in 2006 and concerns began to arise in the middle of last year," Schwartz said. "We got a break early this year but the situation got worse with Operation Twist."
Through July, the 10-year was still in the 3% range "but then dropped like a stone, closing out in the 2% range," Schwartz said, noting it's still around there.
Capturing second place in indexed annuity sales was Aviva
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|Source:||A.M. Best Company, Inc.|