Carriers, and Their Renewal Rates

Sep 19, 2016

  1. RRannuity
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    RRannuity New Member

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    Hey all, I am relatively new to annuities, compared with most people on the board. But, made the following observation on FIAs - the guaranteed min participation rates/Max spreads are pretty pitiful, to say the least. Leaves carriers with a lot leeway to lower rates, at their discretion. Maybe you get 1 or 2 years of great participation, but then you are at the mercy of the carrier, especially if you are locked in for 10 or more years. I could foresee a scenario where you could make almost nothing, in some bad market years. The questions is what incentives do carriers have to keep up renewal rates, especially if their sacrificing growth for income? What's to stop them from saying - oh well, were not meeting our profit projections, lets just lower renewal rates, and in the meantime, continue to offer teaser participation rates for the first year or two to new customers? Who are the top carriers known for the best renewal rates.?
     
  2. Golfnut2112
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    Golfnut2112 Guru

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    There is no guarantee and they all seem to lower rates especially in an up market. I think companies should have a bailout clause stating if we ever renew below a certain rate the customer can liquidate without surrender charges.
     
    Last edited: Sep 20, 2016
  3. EAJoe
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    EAJoe Super Genius

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    Good/fair renewal rates:

    American National (I've seen them renew rates higher than at issue)
    Guggenheim
    Legacy (F&G and Americo)
    American Equity (they have lowered some older products from what they issued at, but generally renew w/ fair rates)
    F&G

    Bad Renewal Rates:

    National Western (one product has an index option issuing with an 85% participation rate and .65% asset fee/spread, and currently renewing with a 55% participation rate and 2.70% asset fee/spread)
    Voya
    Athene (depends on the product)

    One trend you'll notice is that products with an account value bonus or high comp typically have the worst renewal rates. There's 100 pennies in a dollar, and the insurance company has to make money somewhere. This is why I usually prefer products without a bonus.
     
    EAJoe, Sep 21, 2016
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  4. scagnt83
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    scagnt83 Worldwide Expert of Everything

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    I would add Great American to the list of good Renewal carriers. Id also second American Equity.

    LFG has had decent renewals in the past, but their current rates right now are terrible.


    Joe,
    Could you detail which Athene products you have had good/bad experiences with? How do the new Athene products stack up to the inherited Aviva products? Seen any renewals on the 5/7 year product (Ascent Pro) yet?

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    Athene and Great American offer Bailout Caps as well as ROP options.
     
    scagnt83, Sep 21, 2016
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  5. EAJoe
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    EAJoe Super Genius

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    I've heard secondhand that their current non-bonus products have been renewing relatively close to their issue rates, but I've seen firsthand some old Aviva contracts with 20% participation renewal rates.
     
    EAJoe, Sep 21, 2016
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