ANNUITY MARKET ACTIVITY REPORT 2013

Transcription

1 ANNUITY MARKET ACTIVITY REPORT 2013

2 Table of Contents About the I&RS Analytic Reporting for Annuities Service Market Summary Distribution... 6 Insurance / Holding Companies... 8 Products Recent Activity About DTCC Source: Analytic Reporting for Annuities from the Insurance & Retirement Services of National Securities Clearing Corporation, a DTCC Subsidiary. Visit for more information or contact your I&RS Relationship Manager The Depository Trust & Clearing Corporation. All rights reserved. The information in this report may not be (i) used as input data in the creation or calculation of any index, value or other work, (ii) used to create any financial instrument or investment product that is based on, or seeks to match the performance of, values included in this report, or (ii) distributed or published in any form for any purpose, in each case, without the express written permission of DTCC. DTCC s 2013 Annuity Market Activity Report Page 2 of 13

3 About the I&RS Analytic Reporting for Annuities Service Analytic Reporting for Annuities (Analytic Reporting) is an award-winning online information service offered by The Depository Trust & Clearing Corporation s (DTCC) Insurance & Retirement Services (I&RS) business. The service analyzes data from millions of annuity transactions processed for insurance companies and broker/dealers. In 2013, over $178 billion in annuity transactions were processed by I&RS totaling: 117 insurance company participants (representing 42 parent/holding companies) 138 distributors 3467 annuity products These transactions provide a view of a broad range of broker/dealers with a particular concentration in non-proprietary distribution. If you would like more information about this report or about the Analytic Reporting for Annuities service, please contact I&RS at or us at insurance@dtcc.com. Analytic Reporting for Annuities is a service offering of National Securities Clearing Corporation, a subsidiary of DTCC. DTCC s 2013 Annuity Market Activity Report Page 3 of 13

4 2013 Market Summary Inflows into annuity products processed by NSCC in 2013 totaled almost $94 billion, increasing by nearly 11%, or $9.2 billion over Outflows totaled almost $85 billion, increasing by over 15%, or $11.4 billion over The resulting net cash flows totaled $9 billion, declining by over 19% compared to Annuity Cashflows 2013 vs 2012 ll Billions $120 $100 $80 $60 $40 $20 $0 -$20 -$40 -$60 -$80 -$100 Inflows Outflows Netflows The difference in the share of annuity inflows going into qualified and nonqualified accounts narrowed over the year. Overall, non-qualified accounts captured 44% of all inflows in 2013, while qualified account types captured 56% of inflows. DTCC s 2013 Annuity Market Activity Report Page 4 of 13

5 Share of Annuity Inflows by Account Type 70% 60% 50% 40% 30% 20% 10% 0% Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Qualified Non Qualified Net cash flows into non-qualified accounts during the second half of 2013 improved reaching a high in September. In the second half of 2013 net flows were positive every month except December. Millions $600 $400 $200 $0 -$200 -$400 -$600 Non-qualified Account Type Net Cash Flows -$800 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 DTCC s 2013 Annuity Market Activity Report Page 5 of 13

6 2013 Distribution Analysis of inflows, out flows and net cash flows yields a view of each distributor s current cash flow ratio. The scatter chart below shows that a relatively small number of distributors have high net cash flows resulting from high inflows and low out flows. This national view of the distribution market shown by the Analytic Reporting Service can be quite different from the view provided for individual carriers who can compare their own current cash flow ratios by distributor to the national benchmarking information. $5 $4 Distributor Current Cash Flow Ratio Net flows vs Inflows in Annuity Products 2013 Net flows - Billions $3 $2 $1 $0 -$1 -$2 $0 $5 $10 $15 Inflows - Billions DTCC s 2013 Annuity Market Activity Report Page 6 of 13

7 The top 10 distributors accounted for 67% of all inflows in Distributor Share of Inflows % 14% 67% The Territory Management feature of Analytic Reporting allows users to track and benchmark their firm s performance and market share in any combination of states, cities and zip codes, providing a geographic view of market activity, including where business is being done and how business is being conducted in different product types and account types. The top 10 states ranked by inflows (billions) in 2013 accounted for more than half of all inflows. Rank State Inflows ($B) Market Share 1 California $ % 2 New York $ % 3 Florida $ % 4 Texas $ % 5 Pennsylvania $ % 6 New Jersey $ % 7 Ohio $ % 8 Michigan $ % 9 Illinois $ % 10 North Carolina $ % DTCC s 2013 Annuity Market Activity Report Page 7 of 13

8 Users of Analytic Reporting can compare the national level of benchmarking information to their own distribution by zip code to understand their market share and relative market performance in any area of the country. As an example, mapping cash inflows by zip code in Louisiana (the 25 th ranked state in 2013) yields the following view of annuity product distribution in the state: Insurance / Holding Companies The top 10 insurance / holding companies ranked by inflows captured almost 72 billion of inflows, or over 76% of total inflows in DTCC s 2013 Annuity Market Activity Report Page 8 of 13

9 Insurance / Holding Company Share of Inflows 24% 76% top 10 All others The top 10 insurance / holding companies ranked by inflows were: Rank Holding Company Inflows ($B) Market Share 1 Jackson National Life Insurance Co $ % 2 Lincoln National Corporation $ % 3 American International Group, Inc. $ % 4 Prudential Financial $ % 5 Aegon NV $ % 6 Nationwide Financial Services Inc $ % 7 Pacific Life $ % 8 Ameriprise Financial, Inc. $ % 9 Met Life Inc $ % 10 AXA SA $ % The top 10 insurance / holding companies ranked by net cash flows accounted for over $31 billion in positive net flows in Twenty-six insurance parent/holding companies had positive net flows totaling $38 billion while sixteen experienced negative net flows totaling more than $29 billion. The top 10 parent/holding companies ranked by positive net flows were: DTCC s 2013 Annuity Market Activity Report Page 9 of 13

10 Rank Holding Company Net flows ($B) 1 Jackson National Life Insurance Co $ Lincoln National Corp $4.3 3 Ameriprise Financial Group, Inc $3.5 4 American Internation Group, Inc $2.9 5 Prudential Financial $2.1 6 New York Life Insurance Co $1.7 7 Nationwide Financial Services $1.5 8 Symetra Financial Corp $1.1 9 American Financial Group, Inc $ AEGON NV Total $1.1 Net flows for all insurance carriers 2013 ranged from a high of $12 billion to a low of -$10 billion. $15 Range of Net Cash Flows All Insurance/Holding Companies $10 $5 $0 -$5 -$10 -$15 Seventeen of the 42 insurance / holding companies had a current cash flow ratio of more than 50%, meaning that there was $2 or more of inflows for every $1 of out flows. The following chart plots inflows and net flows to show the range of current cash flow ratios. DTCC s 2013 Annuity Market Activity Report Page 10 of 13

11 Carrier Holding Co. Current Cash Flow Ratio Net flows vs Inflows in Annuity Products Jan - Dec 2013 Net flows - Billions $14 $12 $10 $8 $6 $4 $2 $0 -$2 -$4 -$6 $0 $5 $10 $15 $20 Inflows - Billions Products Of the 3,467 annuity products for which NSCC processed transactions in 2013: 726 products had positive net flows totaling almost $83 billion 2,741 products had negative net flows totaling almost $65 billion 118 of the products had more than $100 million in positive net flows 16 of the products had more than $1 billion in positive net flows The top 10 annuity products ranked by inflows captured 32.4% of all inflows. Rank Product Inflows ($B) Market Share 1 PERSPECTIVE II 05/05 $ % 2 RAVA5 ADVANTAGE VARIABLE ANNUITY % 3 PERSPECTIVE L-SERIES % 4 PRU PREMIER RETIREMENT VA B SERIES % 5 POLARIS PLATINUM III % 6 ELITE ACCESS % 7 CHOICE PLUS ASSURANCE B CLASS % 8 USA SERIES VA % 9 PRU PREMIER RETIREMENT VA L SERIES % 10 NYL SECURE TERM MVA FIXED ANN II % DTCC s 2013 Annuity Market Activity Report Page 11 of 13

12 The top 10 annuity products ranked by net flows captured almost $25 billion in positive net flows. Rank Product Net flows ($B) 1 PERSPECTIVE II 05/05 $ RAVA5 ADVANTAGE VARIABLE ANNUITY PERSPECTIVE L-SERIES PRU PREMIER RETIREMENT VA B SERIES ELITE ACCESS POLARIS PLATINUM III CHOICE PLUS ASSURANCE B CLASS NATIONWIDE DESTINATION B NYL SECURE TERM MVA FIXED ANN II LINCOLN CHOICEPLUS FUSION 1.39 Recent Activity Annuity inflows processed by DTCC s NSCC subsidiary in 4Q13 decreased from 8.9 billion in October to 7.7 billion in December. Compared to 4Q12, inflows in 4Q13 increased by 17.6%, from $20.1 billion to $24.4 billion; while out flows stayed relatively flat. Net flows decreased each month of the quarter, reaching a low of -$294 million in December. This was the first time since inception of Analytic Reporting in 2011 that outflows exceeded inflows in a given month. Annuity Cashflows - 4Q13 Billions $10 $8 $6 $4 $2 $0 -$2 -$4 -$6 -$8 -$10 Inflows Outflows Netflows Oct-13 Nov-13 Dec-13 DTCC s 2013 Annuity Market Activity Report Page 12 of 13

13 About DTCC DTCC has operating facilities and data centers around the world and, through its subsidiaries, automates, centralizes, and standardizes the post-trade processing of financial transactions for thousands of institutions worldwide. With 40 years of experience, DTCC is the premier post-trade market infrastructure for the global financial services industry, simplifying the complexities of clearance, settlement, asset servicing, global data management and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, derivatives, money market instruments, syndicated loans, mutual funds, alternative investment products, and insurance transactions. In 2012, DTCC s subsidiaries processed securities transactions valued at approximately US$1.6 quadrillion. Its depository provides custody and asset servicing for securities issues from 131 countries and territories valued at US$37.2 trillion. DTCC s global trade repositories record more than US$500 trillion in gross notional value of transactions made worldwide. For more information, visit DTCC s 2013 Annuity Market Activity Report Page 13 of 13