We would love to hear from you. Click on the ‘Contact Us’ link to the right and choose your favorite way to reach-out!

wscdsdc

media/speaking contact

Jamie Johnson

business contact

Victoria Peterson

Contact Us

855.ask.wink

Close [x]
pattern

Industry News

Categories

  • Industry Articles (21,540)
  • Industry Conferences (2)
  • Industry Job Openings (35)
  • Moore on the Market (441)
  • Negative Media (144)
  • Positive Media (73)
  • Sheryl's Articles (810)
  • Wink's Articles (360)
  • Wink's Inside Story (277)
  • Wink's Press Releases (125)
  • Blog Archives

  • July 2024
  • June 2024
  • May 2024
  • April 2024
  • March 2024
  • February 2024
  • January 2024
  • December 2023
  • November 2023
  • October 2023
  • September 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • November 2009
  • October 2009
  • August 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • November 2008
  • September 2008
  • May 2008
  • February 2008
  • August 2006
  • Aviva USA executive testifies on annuities

    September 14, 2010 by Lynn Hicks

    Rhonda Elming, a senior vice president of product management at Aviva USA, will testify today before a joint hearing of the departments of Treasury and Labor on retirement security.

    The hearing will focus on lifetime income options, and include mutual fund companies, retirement experts, employee advocates and others. Elming is scheduled to testify at 2:45 p.m. Central. The hearing is live-streamed at http://www.dol.gov/ebsa

    Elming will speak on the need to remove barriers so annuities could be offered in employer-sponsored retirement plans.

    “If the obstacles to offering annuities in employer-sponsored plans were removed, Aviva USA and other insurers would be significantly more likely to enter the marketplace and provide consumers with products that meet their lifetime income needs. It’s important to remember that life insurers are the only private market solution that can truly provide lifetime income guarantees,” she said in remarks submitted to the joint committee.

    Below is a copy of her remarks, provided by Aviva:
    Rhonda Elming, Senior Vice President Product Management, Aviva USA
    On behalf of Aviva USA, I thank you for allowing us to appear at today’s combined Department of Labor and Department of Treasury Public Hearing on Lifetime Income. I am Rhonda Elming, senior vice president of product management for Aviva USA. Aviva USA is part of U.K.-based Aviva plc – the sixth-largest insurance company in the world – and a sales leader of fixed indexed deferred annuities and fixed indexed life insurance in the
    United States. Based in Iowa, and with offices in New York and Kansas, Aviva USA has approximately 1 million life insurance and annuity customers and we employ nearly 1,500 people across the country. We can trace the presence of our predecessor companies providing financial
    services in the United States to the late 1800s. We understand the market downturn has created a shift in consumer attitudes toward
    retirement savings. This underscores the importance of planning for retirement with financial tools that offer a lifetime income option. We have researched the marketplace and have spoken with our policy owners. As such, we know that consumer demand has increased for products that provide a safety feature of guaranteed lifetime income.
    Aviva focuses on the sale of annuities through independent agents, and as such, we do not currently offer our products directly through employer-sponsored plans. However, about half of our sales come from qualified annuities, which are often rollovers from employersponsored plans. This indicates a high level of consumer need for the solutions that our
    products offer and which cannot be obtained in an employer plan.
    These products primarily provide access to lifetime income solutions. There are compelling reasons that access to these options within the plan would be efficient and valuable to consumers, however, very real barriers exist in offering annuities through these plans.

    These barriers prompted the Request for Information issued earlier this year and the need for today’s hearing. Clarity on fiduciary standards, annuity portability and disclosure of potential income streams from an account balance are among the issues that need to be addressed. We leave specific proposals to our industry colleagues and support the comments made by the American Council of Life Insurers, the Committee of Annuity Insurers and the Financial Services Roundtable, all of which we are members.
    If the obstacles to offering annuities in employer-sponsored plans were removed, Aviva USA and other insurers would be significantly more likely to enter the marketplace and provide consumers with products that meet their lifetime income needs. It’s important to remember that life insurers are the only private market solution that can truly provide lifetime income
    guarantees.

    As mentioned earlier, Aviva USA is a leader in fixed indexed annuities and is a major issuer of qualified annuities. From our experience, there are many reasons individuals are reluctant to elect receipt of their retirement benefits as a lifetime income option. The Role of SPIAs in Providing a Traditional Guaranteed Income Solution Despite being around for generations, Single Premium Immediate Annuities, or SPIAs, have
    not gained widespread consumer acceptance. While a SPIA can offer a guaranteed lifetime income stream, it requires a large outlay of money while providing no account value in return. The consumer gets a promise of a future income stream, but effectively gives up their rights to their asset and no balance appears on a monthly statement.
    In addition, a SPIA that guarantees income for life offers no death benefit if the consumer dies prematurely. A SPIA also provides no flexibility to alter the amount received. If a consumer’s circumstances change after purchasing the SPIA – for example, medical expenses increase, or they experience a loss of other income – they have no ability to access their annuity. This is critical to understand: many people do not annuitize because they lose access to their money. Going from a large accumulated savings balance to a stream of income with no visible balance or flexibility is a tough psychological prospect for consumers.

    Consumer Financial Literacy
    In addition to issues specific to SPIAs, all lifetime income options suffer from a general lack of consumer knowledge as to the amount of assets needed to support the consumer’s postretirement lifestyle. While financial experts generally accept a withdrawal rate of 4 percent per year from retirement assets to be sustainable for the length of one’s retirement, surveys show that people generally believe they can withdraw between 8 to 10 percent annually. The payout rates offered by lifetime income options, SPIA or otherwise, look unattractive against that overly optimistic belief. Further, consumers don’t fully grasp the long-term effects of inflation on their retirement assets and income streams and often don’t factor in
    the erosion of both their wealth and income over time. Therefore, a huge need exists for educating the consumer about the reality of paying for
    retirement – including both the length of time retirement assets must last – and the income stream a certain amount of assets can support. Traditionally, people underestimate how long they’ll live and overestimate the value of a large lump sum balance in providing an income stream in retirement.
    While consumers have concerns with traditional guaranteed lifetime options, the insurance industry is proud to lead consumer awareness and to shape the sentiments people have toward lifetime income products. Our industry has developed – and continues to perfect – innovative products with proven customer appeal to address their concerns. These products
    guarantee lifetime income while providing death benefits, flexibility of withdrawals, transparency of account values and the potential to keep pace with inflation.
    Consider the Income Rider
    Aviva USA’s fixed indexed annuities are soundly placed in the middle of the road of the market risk continuum. Like a traditional fixed annuity, an indexed annuity provides a guarantee of principal but with an interest crediting rate tied in part to the movement of an outside index such as the S&P 500. The benefit is a historically higher interest rate that provides a more effective hedge against inflation. Variable annuities, on the other hand, carry more risk. While the account value may appreciate more quickly, it is at risk. We believe indexed annuities to be the perfect
    compromise for a consumer seeking stable appreciation and affirmation that the money is there in the long term.

    Aviva USA has been a leader in developing and using unique features on its deferred fixed indexed annuities. For example, our optional income rider provides a viable solution to common consumer concerns. Over 80 percent of our new customers have elected to add an income rider on their policy. They see the benefit in its design as it offers safety and stability through:
    • A guaranteed accumulation benefit to ensure the policy holder has a minimum, predictable base for his or her lifetime income payments, regardless of the underlying policy’s performance;
    • Guaranteed lifetime income payout rates that can double if the policy owner is confined to a nursing home or other qualifying facility;
    • A death benefit option based on the guaranteed accumulation benefit, if elected, to be paid over a five-year period;
    •  Flexibility to start and stop income payments;

    And continued control over the underlying policy account value.
    Income riders essentially allow customers to make periodic withdrawals while they retain access to their annuity’s principal. This ability provides the peace of mind of lifetime income while maintaining an account value that can be passed on to heirs in the event of premature death, or can be accessed for additional income should life circumstances change.
    At Aviva USA, we are in close contact with our customers. Over the past 18 to 24 months, we have received hundreds of customer letters – some emphatically thanking us for offering annuities that were protected from the market crash. While many consumers lost an incredible amount of cash value in their plans, our products provided financial security and a
    guaranteed income stream. We hear directly from our customers that this peace of mind is invaluable.
    Final Thoughts
    We believe that lifetime income security is a pressing issue in the U.S. and one that only financially sound life insurance companies like Aviva USA are qualified to administer. And, we feel that fixed annuities play a role in every consumer’s retirement portfolio, especially for those who cannot risk losing principal or cumulative returns.

    A recent study by Towers Watson found that insurers are increasingly focused on offering retirement income products through retail channels. We are a good example of a company doing just that. However, while we currently focus on the retail marketplace, we do support regulatory changes that would allow consumers to have access through different distribution channels to the suite of valuable products with guarantees offered by us and other insurance companies.
    In closing, we are encouraged by hearings like this one which serve to educate the marketplace and create an open forum for exchanging ideas to improve both our performance and our customer’s acceptance of the products we offer.

    Originally Posted at The Des Moines Register on September 14, 2010 by Lynn Hicks.

    Categories: Industry Articles
    currency