Global Atlantic Financial Group will stop selling new fixed indexed universal life policies, effective July 1.
Employees were informed of the decision in a message last week from Rob Arena, co-president and head of individual markets. Officially, Global Atlantic is suspending sales of IUL, Arena said.
“During the last several years, sales of our indexed universal life insurance products have been steadily declining, from 16% of total Individual Markets’ new business production in 2013 to less than 3% today,” Arena wrote. “During that same time, we have continued to drive growth in our annuity and preneed platforms. The decision to focus on these opportunities is the right one for our business today.”
The decision will affect the employee count at Global Atlantic. Asked for further clarification, the company sent InsuranceNewsNet this statement:
“This decision has unfortunately resulted in a small staff reduction focused on life insurance new business roles. We are working closely with these employees to assist them in their transition to new career opportunities, both within and outside Global Atlantic.”
Global Atlantic’s fixed IUL sales dropped sharply in the first quarter, said Sheryl Moore, CEO of Moore Market Intelligence and Wink, Inc.
“Frequent feedback from the field left me feeling unsurprised about their exit of the indexed life market,” she added. “The word on the street is that they plan to re-enter the indexed life market in 2025, but I would be surprised if they execute on that.”
Most private equity owned life insurers like to focus on fixed types of annuities, Moore explained.
The decision to exit the fixed IUL market does not impact existing policyholders, Arena assured staff. “We will continue to service those policyholders and deliver on our commitments,” he wrote.
“Two years ago, we began a journey to deliver a more modern, digital and consistent client experience, investing first in our annuity and preneed products,” Arena wrote. “This is a significant investment and we have already begun to see material benefits.”
Global Atlantic ranked 10th in total annuity sales during the first quarter with $3.2 billion, according to LIMRA. That is up from $1.95 billion in annuity sales during the year-ago quarter.
Private equity firm KKR & Co Inc. agreed to buy Global Atlantic in a deal that closed in 2021. The transaction was valued at about $4.4 billion. KKR earnings fell in the first quarter, although the firm still beat analysts’ estimates.
Insurers such as American International Group and MetLife have shed their life insurance and annuity units in recent years. Profits are harder to come by due to historically low interest rates, economic turmoil and regulatory pressures.
Wink, Inc. reported last week that life insurance sales were down “across the board” during the first quarter.
InsuranceNewsNet Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at firstname.lastname@example.org. Follow him on Twitter @INNJohnH.
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