by darnardo1 » Tue May 19, 2009 07:38 am
I noticed that in 2008 US captive agents earned approximately 35 billion dollars in variable annuity considerations compared to under 10 billion for independents.
On the other hand independents earned over 37 billion in fixed annuities compared with approximately 16 billion earned by selling the same product by captives.
Why does 1 agent sell more of 1 product than the other? Their sales are almost polar opposite. There must be a reason for this....
On the other hand independents earned over 37 billion in fixed annuities compared with approximately 16 billion earned by selling the same product by captives.
Why does 1 agent sell more of 1 product than the other? Their sales are almost polar opposite. There must be a reason for this....
Posted: Tue May 19, 2009 09:03 am Post Subject:
Why does 1 agent sell more of 1 product than the other?
Well, IMO since the captive agents have to comply with the target set before them by the insurance companies they have to push the product which the company targets to sell more. And since the VAs are more profitable for the insurance companies, those were sold more by the captive agents.
Independent agents, on the other hands are free to choose the products they would consider suitable for the clients.
However, this is purely my opinion. You should wait for the expert’s comment on this issue.
Thanks,
Rupert
Posted: Tue May 19, 2009 11:16 am Post Subject:
I'm not sure what these numbers mean. For instance, how does it get counted when a Northwestern Mutual agent sells a Mass Mutual variable (or fixed) annuity?
I can take a couple of guesses for the reasons why.
1) TIAA-CREF is huge in the 403(b) market. They are captive agents and most of this money is variable.
2) Captive agents are usually pressured to become securities' licensed. Thus they sell both fixed and variable products and are often prohibited from selling FIA's, a fixed product.
3)Many independent agents are only insurance licensed, thus they can only sell fixed products.
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