|
Growth Fueled by Launch of Simple, Low-Cost Annuity Product in 2005
BOSTON, June 27, 2007 - Fidelity Investments1 today reported that sales of its deferred variable annuities increased 138 percent from 2005 to 20062. Strong gains have continued in 2007, with first-quarter sales rising 54 percent year-over-year, significantly outpacing the reported average industry growth for variable annuity sales of 7 percent in the first-quarter of 20073. Year-to-date sales through May are up 60 percent compared to the same period last year4.
The majority of this growth has been driven by the September 2005 introduction of the Fidelity Personal Retirement AnnuitySM5 , a simple, low-cost deferred variable annuity that offers a tax-deferred growth opportunity for investors who are saving for retirement, without the traditional sales, maintenance or surrender fees associated with many annuity products.
"It is clear that this product has struck a chord with investors who may have shied away from annuities in the past given their complexity," said Jon J. Skillman, president of Fidelity Investments Life Insurance Company. "The simplified design, transparent features and low cost of this innovative product have made it easier for investors to understand exactly what they are buying in an annuity and the role it plays in their overall retirement plan."
According to industry rankings for the first quarter of this year, the Fidelity Personal Retirement Annuity (FPRA) was in the top quartile of top-selling variable annuity contracts6. It had one of the lowest annual charges among top competitors, 0.25 percent, which is 82 percent lower than the industry average of 1.40 percent7.
Since directly before the launch of the Fidelity Personal Retirement Annuity in September, overall assets under administration for Fidelity Investments Life Insurance Company (FILI) have increased 32 percent, from $13.4 billion at the end of August 2005 to 17.7 billion through May 31, 2007. This business growth, while mostly driven by increased deferred variable annuity sales, is also attributed to an increase in 1035 contract exchanges. Investors increasingly are evaluating their current annuity to determine whether they have a need for all of the underlying benefits. FILI has seen positive net inflows of 1035 exchanges in 2007 increase 72 percent through May 31, compared to the same period last year.
"We view these positive growth trends as the beginning of a paradigm shift for the industry as more investors recognize the value of an annuity as part of their retirement investment portfolio," said Skillman. "Our focus will remain on educating investors about how their annuities should work alongside their other investments, such as 401(k)s and IRAs, to provide a dependable income stream that can help ensure a more secure retirement."
About Fidelity Investment Life Insurance Services Company
Established in 1987, Fidelity Investments Life Insurance Company (FILI) and for NY residents, Empire Fidelity Investments Life Insurance Company®, NY, NY, develop and market their own insurance products, in addition to distributing those of other well-known insurers. These products are made available to investors through FILI's internal distribution arm, Fidelity Insurance Agency, Inc. (FIA). FILI maintains an AA (very strong, 2nd highest) rating from S&P and an A+ (superior, 2nd highest) rating from A.M. Best8.
About Fidelity Investments
Fidelity Investments is one of the world's largest providers of financial services, with custodied assets of $3.2 trillion, including managed assets of $1.5 trillion as of May 31, 2007. Fidelity offers investment management, retirement planning, brokerage, and human resources and benefits outsourcing services to more than 23 million individuals and institutions as well as through 5,500 financial intermediary firms. The firm is the largest mutual fund company in the United States, the No. 1 provider of workplace retirement savings plans, the largest mutual fund supermarket and a leading online brokerage firm. For more information about Fidelity Investments, visit www.fidelity.com.
Before investing, consider the investment objectives, risks, charges and expenses of the annuity and its investment options. Call or write to Fidelity or visit Fidelity.com for a free prospectus containing this information. Read it carefully.
Principal value and investment returns of a variable annuity will fluctuate and investors may have a gain or loss when money is withdrawn. Taxable amounts withdrawn prior to age 59½ may be subject to a 10% IRS penalty.
Annuities and life insurance policies are issued by Fidelity Investments Life Insurance Company and in NY, Empire Fidelity Investments Life Insurance Company®, NY, NY.
Fidelity Brokerage Services, Member NYSE, SIPC, and Fidelity Insurance Agency, Inc., are the distributors.
1Fidelity refers to Fidelity Investments Life Insurance Company (FILI), and in New York, Empire Fidelity Investments Life Insurance Company® (EFILI), NY, NY.
2 Based on gross sales of deferred variable annuities from January 1, 2005 - December 31, 2005 compared to sales from January 1, 2006 - December 31, 2006.
3According to Morningstar/VARDS®, March 2007.
4Based on gross sales of deferred variable annuities from January 1, 2007 - May 31, 2007 compared to sales from January 1, 2006 - May 31, 2006.
5 In New York, Personal Retirement Annuity.
6According to Morningstar/VARDS® rankings based on gross sales March 2007.
7According to Morningstar/VARDS®, Fidelity Personal Retirement Annuity's annual annuity charge of 0.25% is among the lowest 1% compared to industry average 1.40% for non-group open variable annuity contracts as of 03/31/07. Fidelity Personal Retirement Annuity does not have a minimum guaranteed death benefit whereas the industry average annuity may.
8S&P rating reflects solid position in the variable annuity market, operating performance, capitalization, liquidity and investment quality, 01/07. A.M. Best rating reflects company's financial strength, 01/07.
# # #
Fidelity Brokerage Services, Member NYSE, SIPC
100 Summer Street, Boston, MA 02110
Fidelity Investments Institutional Services Company LLC
82 Devonshire Street, Boston MA 02109 |
