Segment: Annuities
Publication date: Friday, October 30, 2009
# Pages: (31 pages)

Abstract | Table of Contents

This report takes an in-depth look at the fees charged by the Annuity Monitor firms on variable annuity products. Current fee and surrender information is analyzed against 2008 data to assess how firms compare with competitors and identify overarching industry trends.

Variable annuity fees have increased across the industry since 2008. Both the average all-in expense ratio and average fund operating expense increased by as much as a half a percentage point since 2008. On the other hand, average total insurance expenses – the sum of M&E costs, administrative fees and distribution fees – remained virtually unchanged, as did surrender periods and maximum surrender charges.

The reporting of fee and surrender information online yielded mixed results. Though firms provided advisors with a good selection of online data that was easily accessible from product pages, fee transparency was lacking. A majority of firms either did not make fee and surrender data publicly available or forced public users to search through prospectuses or other product literature for the data.

The report also expands on the following key findings:

• 56% of firms increased both minimum and maximum all-in expenses since 2008.
• Direct firms issued the five variable annuities with the lowest minimum all-in expenses in the report.

Subjects

Fees, commissions, etc.

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