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Prudential Annuities’ sales beat industry average as the business offers new products, expands distribution and moves into new markets.

By Theresa Miller

July 16, 2019

The annuities industry has been experiencing a sales boom over the past few years as consumers seek protection from volatile markets and have tried to capture the benefits of rising interest rates, even as the Federal Reserve holds steady for now.

The same is true at Prudential Annuities. In April, the business closed out its best sales month in five years after a robust first quarter, in which sales were up 34% from a year ago and outpaced the industry average. And that’s after 2018’s sales growth of more than 47%—triple the industry’s pace—as the business rolled out new products, expanded distribution and moved into workplace markets.

Investor Satisfaction With Investment Products bar chartAcross the industry, sales have increased for fixed annuity products, while variable annuities continue to provide compelling solutions to many consumer needs.

“I feel confident we have the fuel, runway and momentum to continue to accelerate growth for our business,” says Jim Mullery, head of distribution and sales.

Some of that uptick can be credited to market conditions now driving consumers to annuities, along with a keener understanding of how some annuities can convert savings into retirement income, no matter how the markets perform. But after signaling its commitment to stay in the market in 2017 with key hires and new benefits rollouts, last year Prudential Annuities began to reinvent itself in response to consumers’ needs.

For example, as fixed indexed annuities have become more popular, the business added one to its lineup of mostly variable annuities.

And to help feed consumer demand for products that are simpler, more transparent and easier to understand, the business implemented more flexible technology and agile processes to reduce the time it takes to bring new products to market.

Meanwhile, the business is also helping advisors understand how annuities fit into an overall plan to build financial wellness—working on its own and as a founding member of the Alliance for Lifetime Income, an industry group that provides information about investing in annuities.

This week, the business is adding two new fixed indexed annuities, with expanded distribution through independent marketing organizations and life broker general agencies. Also, this year it will bring a fee-based variable annuity product to meet demand for commission-free solutions, while expanding beyond Prudential and third-party advisors like Edward Jones to target registered investment advisors.

Prudential has historically done very little business with registered investment advisors, who have long favored mutual funds and ETFs over annuities, which they’ve viewed as too complicated and expensive. But they’re warming to annuities as their clients ask for protection and income solutions that lower the risk of running out of money in retirement.

Prudential Annuities is also among the first to jump on a new tech platform designed specifically for registered investment advisors who are looking for insurance products like annuities. And it’s investing in an online sales tool that provides education about potential income, protection and investment options.

Within the industry, the business is also disrupting how annuities are sold, becoming the first to offer a deferred income annuity through the workplace in 2018, which is now available directly to a new kind of customer: Consumers looking to buy small increments of guaranteed income. And in May, it began offering a variable annuity to the American Institute of Certified Public Accountants members who are age 50 and older.

In time, the disruption may upend the industry as Prudential Annuities works to add flexibility to its variable business by letting customers pick their own features—similar to choosing options for a new car—that include personalized income-generating choices. Most important, customers will be able to decide how they’ll collect income at the time they’re ready to be paid, instead of when they sign a contract.

“As the approach to retirement planning is changing, we’re looking to preserve the best of our past while providing a broader range of new products and making them more accessible,” says Kent Sluyter, president of Prudential Annuities. “We’ve done a great job in getting Americans to understand that they need to save for retirement, then take the critical step to turn those savings into income to build lasting financial security. But we still have a lot of work to do.”

 

 

Variable annuities are issued by Pruco Life Insurance Company (in New York, by Pruco Life Insurance Company of New Jersey), Newark, NJ (main office) and distributed by Prudential Annuities Distributors, Inc., Shelton, CT. All are Prudential Financial companies, and each is solely responsible for its own financial condition and contractual obligations. Prudential Annuities is a business of Prudential Financial, Inc.

Annuity contracts contain exclusions, limitations, reductions of benefits, and terms for keeping them in force. Your licensed financial professional can provide you with complete details.

Investors should consider the features of the contract and the underlying portfolios’ investment objectives, policies, management, risks, charges and expenses carefully before investing. This and other important information is contained in the prospectus, which can be obtained from your financial professional. Please read the prospectus carefully before investing.

A variable annuity is a long-term investment designed for retirement purposes. Investment returns, and the principal value of an investment will fluctuate so that an investor’s units, when redeemed, may be worth more or less than the original investment. Withdrawals or surrenders may be subject to contingent deferred sales charges.

Variable annuities offered by Prudential companies have an annual cost of 0.35% to 1.95% for mortality expense and administration fees, with an additional fee related to the professional investment options. The fees will vary depending on the underlying annuity and investment options selected.

All references to income certainty and guarantees, including optional benefits, are backed by the claims-paying ability of the issuing company and do not apply to the underlying investment options.

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Media Contact(s)

Kristin Meza
973-367-4104
kristin.meza@prudential.com