2021

OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has upgraded the Financial Strength Rating (FSR) to B++ (Good) from B+ (Good) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to “bbb” (Good) from “bbb-” (Good) of Nassau Life Insurance Company, Nassau Life and Annuity Company and Nassau Life Insurance Company of Kansas (Overland Park, KS). All of the aforementioned companies are collectively referred to as the Nassau Insurance Group (Nassau).

In addition, AM Best has upgraded the Long-Term ICR to “bb” (Fair) from “b+” (Marginal) of Nassau Companies of New York, Inc., along with its existing Long-Term Issue Credit Ratings (Long-Term IRs). All companies are headquartered in Hartford, CT, unless otherwise specified. The outlook of these Credit Ratings (ratings) has been revised to stable from negative. (See below for a detailed listing of the Long-Term IRs.)

The ratings reflect Nassau’s balance sheet strength, which AM Best assesses as strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The rating upgrades reflect the group’s improved risk profile and strengthened levels of risk-adjusted capitalization on a GAAP consolidated basis, as measured by Best’s Capital Adequacy Ratio (BCAR), due to the transfer of PHL Variable Insurance Company to a holding company that is not owned or controlled by Nassau Financial Group, L.P. or any of its subsidiaries. PHL Variable Insurance Company held a significant amount of high interest rate universal life insurance policies with secondary guarantees that have been a primary reason for significant earnings volatility for the organization over the past several years. The group’s risk-adjusted capital levels also were bolstered by a significant equity infusion from an outside investor. Furthermore, Nassau’s capital and surplus position has increased significantly through the third quarter of 2021 due to the retention of improving operating results that have benefited from reduced mortality, a rebound in investment income and increased earnings from the Foresters Life Insurance and Annuity Company (FLIAC) acquisition that closed in 2020. As a result, the company’s financial leverage ratio has improved substantially, and the amount of intangible assets has been reduced to approximately 75% of shareholder equity.

While Nassau has experienced positive earnings in 2021, net income has historically experienced significant fluctuations on a GAAP and statutory accounting basis due to reinsurance activity, declining investment income and increased mortality within its legacy life insurance business along with other non-recurring expenses. AM Best notes that the lower earnings in recent periods and the use of excess capital for the FLIAC acquisition substantially reduced the company’s statutory capital position and constrained its financial flexibility. The company also maintains exposure to structured securities within its investment portfolio (approximately 20%), including collateralized loan obligations, which includes an elevated exposure to lower-rated tranches. AM Best believes that this portion of the investment portfolio would be less liquid during stress events. However, the group experienced only a moderate amount of impairments in its general account investment portfolio in 2020 and through third-quarter 2021 and currently maintains a significant unrealized gain position.

Management has made significant progress in recent years, streamlining operations and strengthening its ERM framework and capabilities. This includes Nassau’s focus on environmental, social and governance (ESG) initiatives, which includes a diversity, equity and inclusion program and supporting environmentally focused organizations.

Retirement planning covers a lot of issues, including long-term care management, income decumulation and almost everything in between.

We asked several retirement experts what they saw on the horizon for 2022 and what advisors and their clients should expect in terms of the impact of these potential changes. Those weighing in are: Wade Pfau, Carolyn McClanahan, Jamie Hopkins, Marcia Mantell, Ted Benna, David Blanchett and Moshe Milevsky.

See the gallery above for their forecasts of what advisors should expect in the retirement business next year.

Read the full article: https://www.thinkadvisor.com/2021/12/28/8-predictions-for-retirement-in-2022/

WASHINGTON, Dec. 6, 2021 /PRNewswire/ — According to the newly released Alliance for Lifetime Income and CANNEX Protected Retirement Income and Planning Study, investors who were asked to build their own hypothetical $1 million retirement portfolio, said annuities and other income-producing assets were the most favored. The study is a joint research effort designed to better understand and forecast retirement income trends among investors and financial professionals.

When investors designed their $1 million portfolio, they allocated approximately 20% ($200,000) to dividend paying stocks, 14% (approximately $145,000) to real estate and 13% ($136,000) to annuities. Bank CDs (11%) and bonds (10%) round out the top five asset category choices, while “trending” investment opportunities such as SPACs and cryptocurrency fell to the bottom, with 3-4% of assets allocated to each.

The findings contradict the longstanding 60/40 strategy in which 60% of a retirement portfolio’s assets are invested in stocks, while the remaining 40% are invested in bonds—an approach originally designed to simultaneously grow assets and provide income.

“Investors showed a clear interest in building a retirement portfolio that was protected with an annuity,” said Jean Statler, CEO of the Alliance for Lifetime Income, a nonprofit consumer education organization. “We believe this is yet another blow to the outdated 60/40 portfolio mindset. Our research continues to show growing interest and significant demand from consumers for protected income, as more Americans become educated about the lifetime income, asset protection and other benefits of annuities. Unfortunately, the research also found that financial professionals continue to underestimate the intensity of consumer interest in annuities that provide steady income, which is important in volatile markets.”

An overwhelming majority of investors (85%) are interested in owning an annuity that guarantees lifetime income, or already own one. Of investors who are interested in owning an annuity with lifetime income, 49% are extremely interested. In stark contrast, the corollary study of financial professionals found just 18% believe their clients are extremely interested in annuities with lifetime income, indicating that there is a huge gap in what investors want and what advisors think they want. “If that gap continues to widen, financial professionals are likely to find that their clients will go elsewhere for advice,” Statler added.

The study was conducted by Artemis Strategy Group in August and September and includes surveys of 2,004 investors age 45-75. Simultaneously, 505 financial professionals were surveyed across the spectrum, from registered investment advisors to national wirehouses.

Read the entire Press Release: https://www.prnewswire.com/news-releases/in-a-1-million-retirement-income-portfolio-investors-choose-annuities-and-protection-over-traditional-6040-allocation-301437722.html