Beacon's `Fixed Annuity Premium Study' Reports First Quarter's Fixed Annuity Sales


EVANSTON, Ill., May 24, 2006 (PRIMEZONE) -- U.S. sales of fixed annuities reached $17.3 billion in first quarter, 2006, a 3% increase from the previous quarter. Improvement was steady throughout first quarter, with March showing the highest monthly sales. But results were 4% below the same period last year, according to new data from the "Beacon Research Fixed Annuity Premium Study" based on sales of 51 insurance companies. First quarter indexed annuity sales were $7.2 billion, up almost 8% from the prior quarter and 13.1% above first quarter, 2005.

MasterDex, an indexed annuity issued by Allianz Life Insurance Company of North America (note 1), was the quarter's top-selling product in the Study for the seventh consecutive period, followed by Allstate Financial's (NYSE: ALL) Preferred Performance. Two New York Life book value products -- LifeStages/MainStay Single Premium Fixed Annuity and LifeStages/MainStay Preferred Fixed Annuity -- were number three and four, respectively (note 2). Secure Index Opportunities Plus, an indexed annuity issued by ING USA (NYSE: ING), took fifth place. First quarter results include sales of some 196 products.



 Rank  Company Name        Product Name                    Product Type
 ----  ------------------  ------------------------------  ------------
  1    Allianz             MasterDex                         Indexed
  2    Allstate Financial  Preferred Performance             Book Value
  3    New York Life       LifeStages (and MainStay)
                             Single Premium Fixed Annuity    Book Value
  4    New York Life       LifeStages (and MainStay)
                             Preferred Fixed Annuity         Book Value
  5    ING USA             Secure Index Opportunities Plus   Indexed

Two of the top five products also led sales in a distribution channel, with the Allianz MasterDex once again the best seller among independent producers and Allstate's Preferred Performance the bank channel leader. The top seller among captive agents was New York Life's LifeStages Choice Fixed Annuity, a book value product. For the third consecutive quarter, the sales leader among independent broker-dealers was John Hancock's GPA Plus, another book value product(a). But MVA products continued to lead sales in the other B-D channels. MetLife's Fixed Annuity FA took first place among large/regional B-Ds. Allstate's Choice Rate was the best-seller among wirehouses, a position it has held since third quarter, 2005 (note 3).



 Channel             Company             Product           Product Type
 -----------------   ------------------  --------          ------------  
 Banks and S&Ls      Allstate            Preferred
                                          Performance       Book Value
 Captive Agents      New York Life       LifeStages Choice
                                          Fixed Annuity     Book Value
 Independent
  Producers          Allianz             MasterDex          Indexed
 Independent
  Broker-Dealers(a)  John Hancock        GPA Plus           Book Value
 Large/Regional
  Broker-Dealers     MetLife             Fixed Annuity FA   MVA
 Wirehouses          Allstate Financial  Choice Rate        MVA

 -------------------------------------------------------------------

 (a) Due to a distribution channel redefinition, John Hancock's
     independent broker-dealer sales include revenue formerly
     reported as captive agent channel sales.

 Notes:
 (1) Allianz Life Insurance Company of North America is a subsidiary
     of Allianz AG (NYSE:AZ).

 (2) New York Life products sold by career agents carry the LifeStages
     brand name while those sold through other channels carry the
     MainStay brand name.

 (3) Number of products for which sales were reported per channel:
     Banks and S&Ls - 63; Captive Agents - 84; Independent Producers
     - 82; Independent Broker-Dealers - 30; Large/Regional
     Broker-Dealers - 33; Wirehouses - 14.

By product type, Allstate's Choice Rate was also first quarter's best-selling market-value adjusted (MVA) product. Genworth had the leading immediate annuity.

Treasury rates rose steadily in first quarter. Rising rate environments tend to favor sales of one-year interest guarantee periods (IGPs) over longer IGPs. But the dominance of one-year IGPs continued the decline seen in fourth quarter, 2005. The one-year IGP accounted for just 22.2% of MVA sales, down significantly from 38.7% in fourth quarter, 2005. The decline was much less dramatic among book value products, from fourth quarter's 85.7% of sales to 83.2% in first quarter, 2006.

"Fixed annuity sales tend to increase as interest rates rise, as was the case in first quarter," said Jeremy Alexander, CEO of Beacon Research. "We expect to see further improvement in fixed annuity sales this year. Rates have continued to rise since first quarter and, more important, the yield curve started to steepen at the end of March. A steeper yield curve will enable insurers to give fixed annuities a competitive rate advantage by investing in longer term fixed income instruments to back annuities with shorter rate terms."

About the Beacon Research Fixed Annuity Premium Study

The quarterly Study is the first to track and analyze product-level fixed annuity sales on an ongoing basis. It features commentary by Milliman USA, a leading actuarial consulting firm recognized for its annuity expertise. Combining Beacon's capabilities in fixed annuity information with Milliman's knowledge and analytic skills, the Study provides timely market intelligence of the highest quality. It's designed to report what's moving in each channel and why. The rapid growth in Study participation is testimony to the need for this information.

About Beacon Research

Beacon Research is an independent research organization founded in 1997. It compiles market intelligence on fixed annuity products for subscribers to its web-based systems at www.annuitynexus.com. Carriers access these systems to support product development, rate setting and competition research. Distributors use them for product analysis and selection. The new AnnuityNexus Sales Support System is an important resource for retention teams and sales desk staff throughout the distribution chain. Beacon also licenses information and software tools to other platforms, including websites for sales representatives and AnnuityNet's annuity automation platform. Beacon's fixed annuity benchmark series -- the industry's first - is available through Ibbotson Associates. Directly and through strategic alliances, Beacon information can be accessed by hundreds of financial institutions and distributors.

The Beacon Research logo is available at http://media.primezone.com/prs/single/?pkgid=509



            

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