Not every U.S. life insurer faced an uphill battle in what LIMRA recently described as the weakest first half of a calendar year for annuity sales since 2001.
U.S. individual annuity sales fell by 9.8% for the first six months of 2017 and by 7.8% for the second quarter, according to a review of survey data collected and reported by the LIMRA Secure Retirement Institute. But while four of the top 10 annuity producers generated double-digit year-over-year percentage declines in sales for the first six months of 2017, Nationwide Mutual Group stood alone on that list in achieving a double-digit rate of expansion.
Fueled by strong sales of fixed indexed annuity products by Nationwide Life & Annuity Insurance Co., the group produced growth in total annuity sales of 23.5% for the first half of the year and of 39.1% for the second quarter, according to the LIMRA survey data.
Direct ordinary individual annuity considerations attributable to Nationwide Life & Annuity, Nationwide Life Insurance Co. and Harleysville Life Insurance Co. as reported on quarterly statutory statements collected by S&P Global Market Intelligence increased by 16.5% for the first half of 2017 and 24.3% for the second quarter. When adding annuity considerations reported by Jefferson National Life Insurance Co. and Jefferson National Life Insurance Co. of New York, the variable annuity writers which Nationwide acquired on March 1 for $201.6 million, to the respective 2017 totals, the growth rates increase to 19.7% and 27.8%.
The indexed annuity-focused Nationwide Life & Annuity accounted for 45.6% of the group's direct individual annuity considerations in the second quarter (including the Jefferson National Life companies), up from 34.8% in the year-earlier period (excluding Jefferson National Life).
The LIMRA survey put Nationwide's indexed annuity sales at $2.26 billion for the first half of 2017, which represented 88.2% of the group's fixed annuity production and 45.1% of its total annuity sales. Only Allianz Life Insurance Co. of North America and Athene Holding Ltd. generated higher levels of indexed annuity sales for the period. Nationwide logged $1.52 billion of indexed annuity sales in the first half of 2016, sixth-highest in the industry behind Allianz, American Equity Investment Life Holding Co., American Financial Group Inc., American International Group Inc. and Athene. Its growth rates in the category totaled 48.4% for the first six months of 2017 and 77.1% for the second quarter.
Only Athene and Brighthouse Financial Inc among the top 10 indexed annuity producers joined Nationwide in generating double-digit growth rates in indexed annuity sales for both periods (assuming results for MetLife Inc. in LIMRA's 2016 surveys would be attributable to the companies that now make up Brighthouse on a post-split basis). Athene's growth rates totaled 54% and 53.5%, respectively, while Brighthouse's expansion for both periods was in the low double digits.
For the industry as a whole, the LIMRA survey showed declines in indexed annuity sales of 8.5% for the first half of the year and 3.7% for the second quarter.
Steve Cooney, Nationwide's vice president of business development for annuities, attributed his company's outperformance to a suite of products that "resonate strongly in the market." He credited the "strong performance" of the indexes to which Nationwide's products provide access, including the J.P. Morgan Mozaic II Index and the NYSE Zebra Edge Index, for helping to attract business.
Cooney said the U.S. Department of Labor's fiduciary rule created a headwind for certain of Nationwide's distribution partners, but he cited the strength and value proposition offered by the company's product portfolio for helping it overcome those challenges.
Athene, for its part, credited competitive products and high-quality service for its rapid expansion in indexed annuity sales. President William Wheeler, speaking during an Aug. 10 conference call, said he believes both fixed annuities and fixed indexed annuities represent "a significant organic growth opportunity" for Athene.
Nationwide is well on its way to exceeding the $2.68 billion in indexed annuity sales LIMRA attributed to the company in full-year 2016. In addition to the success associated with existing products, the company unveiled its first fee-based indexed annuity in July that it expects will better meet the needs of registered investment advisers and fee-based advisers.