09 March 2011

Axa Concentrating on Variable Annuities

Axa Concentrating on Variable Annuities ; Leading personal investment firm Axa Wealth will continue to concentrate on variable rate annuities for the foreseeable future. Axa annuities have traditionally included only variable rate products, and company sources have only indicated that the insurance and investments giant is considering entering the market for fixed-rate annuities.

Axa annuities are handled by the Axa Wealth division of the firm, and while sales have increased 41% there have been organizational issues which have plagued the firm owing to the sale of its life insurance division. Therefore, and especially because Axa has launched a new series of variable-rate products called Secure Advantage, it has no plans to enter the fixed-rate segment of the pension annuities market.

Axa annuities chief Mike Kellard, who heads the Axa Wealth division, indeed confirmed that Axa wishes to gauge response to the Secure Advantage products before it ventures in any other direction as far as annuities are concerned. On the other hand, a leading competitor points out that the fixed-rate segment is a very price oriented part of the market and that Axa may not feel it can compete on price at this time.

The Secure Advantage range was first rolled out in 2010, and it offers a choice between a 10 year return of invested capital or a lifetime income plan that can include immediate or deferred payouts. In order to be able to calculate benefits, the range offers lock-ins on an annual basis,

As these features are new for Axa, and the range has only been offered for approximately half a year, the firm clearly is now dedicating its resources to the Secure Advantage range. While Axa Wealth clearly has the resources to enter the fixed-rate annuity market, its leadership feels that its efforts are best concentrated on existing products that are indeed relatively new.

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