Thursday, January 28, 2010
Variable Annuities Are Down but Not Out
The pricey, complex insurance contracts essentially did their job-paying out a steady stream of income to clients regardless of the plunging markets-but the companies that backed them took a hit.
In response, last year they began to reduce the benefits offered and raise prices. Many have overhauled the structure of their contracts altogether. Some industry observers take a glass-is-half-full attitude and say that the market turmoil gave the industry a gift by forcing it to recognize that its wares were too complicated and pushed it to create simpler products. "Nobody thinks prices up and benefits down is a good thing," says Frank Zafran, director of annuity products at Morgan Stanley Smith Barney. "But the industry simplifying its product line is a good thing..."
OnWallStreet: Variable Annuities Are Down but Not Out
In response, last year they began to reduce the benefits offered and raise prices. Many have overhauled the structure of their contracts altogether. Some industry observers take a glass-is-half-full attitude and say that the market turmoil gave the industry a gift by forcing it to recognize that its wares were too complicated and pushed it to create simpler products. "Nobody thinks prices up and benefits down is a good thing," says Frank Zafran, director of annuity products at Morgan Stanley Smith Barney. "But the industry simplifying its product line is a good thing..."
OnWallStreet: Variable Annuities Are Down but Not Out
Permalink posted by markw @ 7:16 AM 
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