New Considerations for Fixed Annuities


One of the questions at last night’s Panel of Professionals hosted by KFNN Radio 1510 asked if investors should be concerned private equity firms are beginning to purchase fixed annuity companies. Bloomberg Businessweek had a story on it this morning. Fifteen percent of the fixed annuity market is handled by Wall Street-backed insurers, so you (and regulators) should be concerned.

Companies like Apollo Global Management, Goldman Sachs Group, Harbinger Group, and Guggenheim Partners are acquiring life insurance companies that specialize in retirement savings products known as fixed annuities. The investment options made by these companies are traditionally riskier than the former owners because these companies will expose policy holders for greater return (and greater risk.) The Los Angeles Dodgers baseball team is partially owned by one company.

If you have a fixed annuity or are considering one, you now have one more consideration in making a decision – how will your underlying investments really be invested?