Guggenheim Partners LLC is emerging as a winner in the indexed-annuity market and seems poised to snap up even more business.
The asset manager is expanding its footprint in annuities through acquisitions. This month, it purchased the U.S. fixed-annuity business of Canadian carrier Industrial Alliance Insurance and Financial Services Inc.
Guggenheim's previous investments in the market appear to be paying off. EquiTrust Life Insurance Co., which it acquired last October, brought in $197 million in indexed-annuity sales in the second quarter, up 28% from the year-earlier period, according to the AnnuitySpecs online newsletter.
Security Benefit Corp., which Guggenheim bought in July 2010, soared to fourth place among indexed-annuity sellers during the second quarter. That's a remarkable increase, considering that the insurer started selling the products only last year and is competing against such established rivals as Allianz Life Insurance Co. of North America and Aviva USA.
Security Benefit made $645 million in indexed-annuity sales during the quarter, garnering a 7.5% market share, according to data from AnnuitySpecs. That is up by 240% from the year-earlier period. Though Allianz remains the No. 1 carrier in indexed annuities with a 16% market share, Security Benefit's Secure Income annuity was the top-selling product for the quarter.
Observers said that Security Benefit's distribution arrangement with Advisors Excel LLC, an independent marketing organization, is behind the insurer's steep rise in sales. The Secure Income annuity is available exclusively through independent insurance producers who have an affiliation with Advisors Excel.
Security Benefit also is offering attractive features at a time when low interest rates have insurance carriers rethinking how to market annuities, given the necessity of pulling back on generous benefits.
The Secure Income annuity features a 10-year surrender period, a 7% compound roll-up and an 8% bonus.
Security Benefit spokeswoman Michel' Cole declined to comment.
dmercado@investmentnews.com Twitter: @darla_mercado
