Best Variable Annuity Companies 2020

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Who are the Best Variable Annuity Companies?

Variable Annuities have decreased in popularity in recent years. This is partially due to increased volatility in the markets but mainly because the cost of variable annuities and their optional income riders have increased drastically over the last 10 years.

In this article, we will list the best variable annuity companies in 2020 based on total sales through the 3rd quarter.

So without further ado let’s get started.

Best Variable Annuity Companies 2020

  1. Jackson National Life
  2. Equitable Financial
  3. Lincoln Financial Group
  4. TIAA
  5. AIG Companies
  6. Brighthouse Financial
  7. Prudential Annuities
  8. Allianz Life of North America
  9. Nationwide
  10. New York Life
 

Best Variable Annuity Companies 2020 by the Numbers

 

The Secure Retirement Institute® (SRI®) releases annual and quarterly Annuity Sales results in each year and recently published variable annuity sales results for the first 9 months of 2020.

Total annuity sales were $54.8 billion in the third quarter, up 13% from the second quarter 2020 but 8% lower than prior year results, according to preliminary results from the Secure Retirement Institute® (SRI®) U.S. Individual Annuity Sales Survey.

Variable sales were $70.7 billion in the first nine months of 2020, down 6% from the first three quarters of 2019. SRI is forecasting VA sales to remain steady in the fourth quarter and to reach $89-$94 billion by the end of 2020.

An interesting note worth mentioning is the top 20 variable annuity companies have accounted for 95% of total variable annuity sales through Q3 2020.

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2020 Variable Annuity Sales

The table below lists the best variable annuity companies based on sales through the 3rd quarter of 2020. Jackson National was is the best variable annuity company thus far with $11.68 billion in sales. 

RankVariable Annuity CompanyVA Sales
1Jackson National Life $11,686,260
2Equitable Financial $7,611,205
3Lincoln Financial Group $7,540,623
4TIAA $6,626,000
5AIG Companies $4,334,963
6Brighthouse Financial $4,239,495
7Prudential Annuities $3,936,450
8Allianz Life of North America $3,034,231
9Nationwide $2,879,700
10New York Life $2,847,009

($ in thousands)

Source: Secure Retirement Institutre* U.S. Individual Annuities Sales Survey

Best Variable Annuity Companies

#1. Jackson National Life

Jackson National Life Insurance CompanyRating
1 Corporate Way, Lansing, MI 48951
A.M. Best Rating (15 possible ratings)A (3)
Moody's (21 possible ratings)A1 (5)
Fitch (21 possible ratings)A+ (5)
Standard & Poor's (Financial Strength, 20 Ratings)A+ (5)
Comdex (percentile of all rating companies)84

#2. Equitable Financial

Equitable FinancialRating
1290 Avenue of the Americas, New York, NY 10104
A.M. Best Rating (15 possible ratings)A (3)
Fitch (21 possible ratings)A- (7)
Moody'sA2

#3. Lincoln Financial Group

Lincoln Financial GroupRating
1300 South Clinton St., Fort Wayne, IN 46802
A.M. Best Rating (15 possible ratings)A+ (2)
Moody's (21 possible ratings)A1 (5)
Fitch (21 possible ratings)A+ (5)
Standard & Poor's (Financial Strength, 20 Ratings)AA- (4)
Comdex (percentile of all rating companies)90

#4. TIAA

TIAARating
A.M. Best Rating (15 possible)A++ (1)
Fitch (21 possible)AAA (1)
Standard & Poor's (20 possible)AA+ (2)
Moody's (21 possible)Aa1 (2)

#5. AIG Companies

American General Life Insurance CompanyRating
A.M. Best Company (Best's Ratings, 15 Ratings)A (3)
Moody's (Financial Strength, 21 Ratings)A2 (6)
Standard & Poor's (Financial Strength, 20 Ratings)A+ (5)
Fitch Ratings (Financial Strength, 21 Ratings)A+ (5)
Weiss (Safety Rating, 16 Ratings)B (5)
Comdex Ranking (Percentile in Rated Companies)82

#6. Brighthouse Financial

Brighthouse FinancialRating
11225 N Community House Rd, Charlotte, NC 28277
A.M. Best Rating (15 possible)A (3)
Fitch (21 possible)A (6)
Standard & Poor's (20 possible)A+ (5)
Moody's (21 possible)A3 (7)

#7. Prudential Annuities

Prudential AnnuitiesRatings
A.M. Best Rating (15 possible)A+ (2)
Fitch (21 possible)AA- (4)
Standard & Poor's (20 possible)AA- (4)
Moody's (21 possible)Aa3 (4)

#8. Allianz Life of North America

Allianz LifeRating
5701 Golden Hills Dr., Minneapolis, MN 55416
A.M. Best RatingA+
Moody's (21 rankings)A1 (5)
Comdex (percentile of all rated companies)94
Standard & Poor's (20 Possible Ratings)AA (3)

#9. Nationwide

Nationwide Life & Annuity CompanyRating
One Nationwide Plaza, Columbus, OH 43215
A.M. Best Rating (15 possible ratings)A+ (2)
Moody's (21 possible ratings)A1 (5)
Standard & Poor's (Financial Strength, 20 Ratings)A+ (5)
Comdex (percentile of all rating companies)90

#10. New York Life

New York LifeRating
A.M. Best Rating (15 possible)A++ (1)
Fitch (21 possible)AAA (1)
Standard & Poor's (20 possible)AA+ (1)
Moody's (21 possible)Aaa (1)
Comdex100

What is a Variable Annuity?

A variable annuity is a type of annuity contract, the value of which can vary based on the performance of an underlying portfolio of mutual funds. Variable annuities differ from fixed annuities, which provide a specific and guaranteed return.

Understanding Variable Annuities

There are two elements that contribute to the value of a variable annuity: the principal, which is the amount of money you pay into the annuity, and the returns that your annuity’s underlying investments deliver on that principle over the course of time. The most popular type of variable annuity is a deferred annuity. Often used for retirement planning purposes, it is meant to provide a regular (monthly, quarterly, annual) income stream, starting at some point in the future. There are also immediate annuities, which begin paying income right away. Before buying a variable annuity, investors should carefully read the prospectus to try to understand the expenses, risks, and formulas for calculating investment gains or losses.  A Closer Look at Variable Annuities In “The Future View of U.S. Annuity Sales” research paper, The Secure Retirement Institute projects variable annuity (VA) sales to decline in 2020, but then have rebounding growth in 2021 and 2022. The report is predicting the COVID-19 pandemic will have a significant impact on the VA market in 2020. Extreme volatility will have investors seeking safety and will keep many away from purchasing equity-based products, particularly products with limited insurance guarantees. Low interest rates will impact guaranteed living benefit offerings. Expectations are for sales of investment-focused VAs and products with guaranteed living benefits to decline by as much as 15 percent or more, similar to the 18 percent decline the VA market experienced in 2009. The registered index-linked annuity (RILA) market has not experienced a period of extreme market stress, as the first product to hit the market happened in 2010. In this year’s forecast, RILAs have been segmented, since sales expectations are much different than those of the other VA product types. Registered index-linked annuity products will have appeal in times of equity market volatility as they can provide a combination of downside protection and growth potential. RILA sales are expected to grow to nearly $20 billion in 2020 as investors look for the balance of protection, safety, and growth potential. The report suggests in 2021, variable annuity sales will rebound as the economy gets back on track. Modest growth is expected for investment-focused variable annuities and VAs with guaranteed living benefits, with stronger growth expected with RILA products. In 2021, RILAs could represent nearly a quarter of all variable annuity sales. Finally, the report believes that in 2022, equity markets are expected to be back at the pre-pandemic levels. This will help continue to spur variable annuity sales growth, bringing sales to levels not seen since 2016. RILAs will continue to see a faster growth rate than traditional variable annuity products as more carriers will be offering these products, combined with investors who will likely still be looking for a balance of protection and growth.

Fixed Index Annuities

If you are looking for upside potential and some downside protection a fixed index annuity may be a more appropriate alternative worth considering. Fixed index annuities offer upside potential based on the performance of a market index and downside protection from a potential market downturn. You can shop and compare current fixed index annuity rates at our online annuity store.

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