ING U.S. Financial Services says it is continuing a focus on its annuity business as aging baby boomers become more interested in the product, and the company has hired Harry N. Stout to be the annuity business group’s president in the retail financial services unit.
In the newly created post Mr. Stout is responsible for the marketing, sales, product development, and financial management of the Atlanta company’s $50 billion annuity business.
“The business itself is a Top 5 business,” said Mr. Stout regarding ING’s motive for its focus on annuity sales. “We’re going through and validating our competitive positioning in the U.S. market,” he said.
“The business does $9 billion of premium a year,” said Mr. Stout. He added that the annuity business is positively positioned for the demographic change that will prompt aging baby boomers’ interest in the product.
“We want the financial institution area to grow,” he said. “We grew variable annuity sales through banks, and we want to continue that growth in 2005.”
Last year, ING was ranked No. 20 among sellers of annuities through banks by Kenneth Kehrer Associates, a consulting firm in Princeton, N.J., that tracks banks’ insurance product sales. The company had sales of $626 million in the channel, down 40% from 2002.
“We expect double-digit growth over the immediate term,” he said.
To achieve such growth, Mr. Stout said, ING will keep increasing its sales force for the financial institution market and expanding its product offerings.
ING added several annuities recently, he said, including variable products with guarantees and other protections against big losses in equity market downdrafts.
It also is focusing on marketing fixed index annuities. “The majority of customers want” annuities with an interest rate tied to an index “as a cushion,” he said.
In a June conference call, Thomas J. McInerney, the chief executive of ING Group’s U.S. arm, said its annuity business was “increasingly focused on expanding our distribution with the banks.” Over all, he said then, sales had been solid, and both fixed and variable annuity sales in banks rose more than 50% in the first quarter.
Mr. McInerney credited a stronger economy, the start-up of products and features, and increased distribution in all core channels, including banks.
Mr. Stout, who will be based in West Chester, Pa., joined ING from Old Mutual U.S. Life Holdings Inc., where he was deputy chief executive. He previously was the president and chief executive officer of Fidelity and Guaranty Life Insurance Co.
“Harry has a strong working knowledge of annuity and insurance products, services, and markets,” said Jacques de Vaucleroy, the group president for the Amsterdam-based parent’s U.S. retail financial services unit, in a press release.
