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PHILADELPHIA ANNUITY
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Prudential Shares Plunge After Moody’s Downgrade
Prudential Financial Inc., the second-biggest U.S. life insurer, led decliners in the Standard and Poor’s 500 Index after a downgrade by Moody’s Investors Service on costs tied to retirement products. Prudential fell $6.16, or 25 percent, to $18.76 at 4:15 p.m. in New York Stock Exchange composite trading, the most since the company went public in 2001. The insurer has plunged by more than 70 percent in the past 12 months. Life insurers, which often guarantee minimum returns on retirement products called variable annuities, have suffered as declines in stocks backing the policies forced them to set aside more capital
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MetLife Boosts Equity-Linked Annuity Regs
MetLife has come out in support of a Securities and Exchange Commission proposal that would force equity-linked annuities to be regulated as securities, just as variable annuities are. The insurer filed a motion Monday to submit a brief to the SEC charging that for competitive reasons only licensed broker dealers should be able to sell equity-linked... DW Online: MetLife Boosts Equity-Linked Annuity Regs (Subscription required)
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Adjusting annuities: Insurers moving to passive strategies for better hedging
Insurance companies are adding more passive subadvisers to their annuities lineups, hoping to hedge their programs more effectively after active managers struggled last year to match their plunging benchmarks. That “trend is already occurring and will continue,” said Del Campbell, assistant vice president, variable annuity, product development with Lincoln Financial Group, Philadelphia... P&I Online: Adjusting annuities
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Number of Mutual Funds Could Decline 70% by 2014
With mutual fund investors burned by negative returns of 30% to 50% over the past year, they are unlikely to remain confident about their investments, Celent predicts. As a result, the universe of 7,000 funds could shrink by as much as 70% over the next five years, leaving only 2,000 funds in existence. “The entire financial services sector has been mauled, causing portfolios and retirement plans to hemorrhage value while requiring investors to question such basic issues as capacity for risk and planning for retirement,” said Robert J. Ellis, senior vice president of the wealth management practice at Celent and
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