Aug 2010 Financial News

Rush for annuities slowing, says Miller

Aug 24, 2010

THE RUSH for annuity products in the United States of America which began in 2008 did not continue into this year.

Word of this comes from Dodridge Miller, president and chief executive officer of Sagicor Financial Corporation.

His comments came last Tuesday during a teleconference to discuss the group’s results for the first half of this year, at the Sagicor Corporate Centre, Wildey, St Michael.

Miller explained that although Sagicor at Lloyds showed strong growth, this was partially offset by lower growth in the United States since there was reduced demand for annuity products.

“In 2009 a lot of our sales in the United States related to single premium annuities and other annuities.

“The market in general – and Sagicor, as well – reduced its demand and supply for annuity products and so you have a lower level of premium revenue in the US than in 2009,” he said.

Miller added that coming out of the crisis in 2008 “when interest rates literally went to zero”, investors and “baby boomers” were looking for investment options.

He noted that they gravitated towards annuity products from insurance companies who had not suffered the same fate as commercial banks and had higher investment returns than banks and the stock market were offering at the time.

“So there was a movement away from the banks to the insurance companies through the annuity products.

“That settled down in 2009, so the rush in 2008 to 2009 didn’t follow through in 2010. There was unusually high demand in 2009 and the market retreated since then.

“I think that is also good for the market because increased annuity business means increased capital to support it,” Miller said. (NB)


Source:
Nation News
Tuesday August 24, 2010

http://www.nationnews.com/articles/view/rush-for-annuities-slowing-says-miller/