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MassMutual surges into lead as top US annuity writer in Q1'20


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MassMutual surges into lead as top US annuity writer in Q1'20

Group annuity considerations of the affiliates of Massachusetts Mutual Life Insurance Co. more than doubled year over year in the first quarter, catapulting it to the top spot in the industry.

MassMutual's total annuity considerations increased roughly 70% year over year to $5.88 billion, according to a review of its regulatory filings. The mutual insurer's group considerations rose 115% to $4.69 billion, while individual considerations fell 6.8% to $1.19 billion.

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The increase in MassMutual's group annuity considerations was attributable to higher defined benefit, investment only, defined contribution and pension risk transfer product sales.

Companies transferring their pension obligations have boosted several U.S. life insurers' group annuity considerations over the past few years. MassMutual has been an active participant in the pension risk transfer, or PRT, market and has been part of numerous deals since 2016.

MetLife Inc. President and CEO Michel Khalaf said during the company's first-quarter earnings call that PRT deals have slowed while its Stable Value offerings have surged within 401(k) plans as participants and sponsors "seek the safety" of those products. MetLife's group annuity considerations surged to $4.49 billion during the first quarter of 2020, up 216.8% from the prior year.

Of the 15 largest annuity writers during the quarter, New York Life Insurance Co. experienced the biggest year-over-year increase within the group business line, a rise of nearly 221% to $3.17 billion. That growth helped move New York Life into second place in total annuity considerations during the quarter; its total annuity considerations were $5.83 billion during the quarter.

The U.S. life insurance industry experienced double-digit growth year over year for group considerations during the first quarter, but individual considerations fell by 4.9% to $51.51 billion. Quarterly individual considerations have been falling since the second quarter of 2019, when a tally of $57.23 billion was the highest in over a decade.

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Nine of the largest writers of annuity considerations reported lower individual annuity considerations versus the first quarter of 2019. Of these, Athene Holding Ltd. and American International Group Inc. had the biggest year-over-year decreases, of 31.4% and 24.4%, respectively.

AIG reported net flows within the fixed annuities line of business of $600 million during the first quarter, down from $1.8 billion in the prior-year period. Index annuity premiums ticked down as well, but variable annuities rose by 50% to $900 million.

Jackson National was the largest writer of individual business during the quarter with $4.92 billion in considerations, an increase of almost 42% when compared to the first quarter of 2019.

Individual annuities refer to fixed and variable annuities and is reported as ordinary within NAIC statutory statements. Group annuities include investment options typically available in tax-advantaged savings accounts and guaranteed investment contracts.

S&P Global Market Intelligence uses statutory total annuity premiums and considerations to determine market share. Total annuity consideration is a preferred indicator of market share as it not only reflects new business but also the persistence of a company's existing business in the form of renewal annuity considerations. Additionally, many policyholder acquisition costs are not recovered within one year. As such, total annuity premiums and considerations can also be a better indicator of profitability for life insurers, whereas new sales do not necessarily equate with profitability.