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AIG Partners With Envestnet Insurance Exchange Platform

Zacks Equity Research

American International Group, Inc. AIG has entered into a partnership with Fiduciary Exchange, LLC (FIDx).

In June, FIDx backed Envestnet Insurance Exchange platform to provide a product-agnostic exchange that easily connects advisors to annuities and insurance solutions from the industry’s leading carriers. Some of the insurers who are already part of this ecosystem are Brighthouse Financial BHF and Prudential Financial Inc. PRU.  

AIG’s agreement with FIDx will give the financial advisors access to annuities products provided by AIG Life & Retirement segment on the Insurance Exchange platform. This will enable advisors to offer their clients annuities products as part of their investment planning needs.

This deal will lead to greater annuity sales across all categories namely fixed, indexed and variable. Annuities products continue to witness high demand, as expanding life span has increased the need of seniors to receive a regular income during retirement period, which can span 30 to 40 years.  And this is where annuity products come in handy, since these improve the financial wellness of investors.

In the third quarter, the company witnessed an increase in indexed annuity sales, but its fixed annuity sales remained muted. It further expects a decline in the sales of fixed indexed annuity (FIA) given the low interest rate environment.

Results from the LIMRA Secure Retirement Institute Annuity Sales Survey, which represents 95% of the U.S. market, show FIA sales broke records in the first two quarters of 2019.

The growth of FIA is likely to continue given the demographic projections, which indicate that there will be nearly 9 million more retirees over the next five years (2019-2024), who will seek to buy FIA products that provide protected investment growth.

Year to date, the stock has gained 41% compared with the industry’s growth of 12.3%.

 

AIG carries a Zacks Rank #4 (Sell).

A better-ranked stock in the same space is Kemper Corp. KMPR. The stock carries a Zacks Rank #1 (Strong Buy) and has surpassed estimates in each of the last four reported quarters, the average beat being 16.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.

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