In this article, we will be taking a look at the 10 best annuity companies in the US.
Within the world of insurance companies, annuities are a more specialized concept. These are contracts between clients and insurance companies that require the insurer to make payments to the customer immediately or in the future. An annuity can be bought either by making a single payment or by making a series of payments spread out over a few years. There are four main types of annuities: immediate, deferred, fixed, and variable. Annuity companies’ customers can thus pick their preferred type of annuity depending on when they want to start receiving their annuity payments and how they would like for their annuity to be invested. As of November 2022, AM Best, a top credit rating agency, maintains a Stable outlook for the US life/annuity segment. This signifies the strength and resilience of annuity companies in the US over the past year, showing why they are in focus today.
For most people, their interaction with the concept of insurance begins with traditional insurance companies such as Metlife, Inc. (NYSE:MET), UnitedHealth Group Inc. (NYSE:UNH), and Markel Corporation (NYSE:MKL). Annuity companies are also part of the insurance industry and have been benefitting over the past couple of years due to a range of factors. According to AM Best’s market segment report on the annuity segment, published in November 2022, these include cost savings and a pandemic-driven acceleration in product and systems modernization. The Stable outlook for the annuities segment is helped by annuity companies’ solid capital management and record sales growth. Even though the annuities segment saw earnings volatility in 2022, capital markets gains and diversified earnings enabled the segment to offset the mortality impact of the coronavirus pandemic.
On sales growth, the report noted that annuity sales have managed to steadily rise in 2022. In the second quarter, they increased by 22% to $77.5 billion. This was the highest quarterly sales figure recorded for the annuities segment and was made possible by ongoing equity market declines and rising interest rates. For fixed-rate, deferred annuities, sales growth was recorded at 76%, while for fixed-index annuities, sales growth was recorded at 19%, in comparison with the second quarter of 2021. Even generally, the insurance industry benefitted from a renewed interest in life insurance in 2022. New life insurance annualized premiums increased by 17% in the first quarter of 2022, making this quarter the fifth-consecutive quarter of double-digit premium growth for life insurance. As such, annuity companies are expected to continue their upwards trend in 2023, with higher sales growth than ever before.
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Let’s now take a look at the 10 best annuity companies in the US.
Our Methodology
To create our list of the best annuity companies below, we have relied on two metrics: AM Best’s ratings demonstrating the financial strength of these companies and the fixed annuity rates offered by them as of January 2023. AM Best’s rating system includes categories going down from A++ to F, and these ratings primarily indicate the financial stability of the company concerned. All the companies mentioned below have ratings of B+ (Good) and above, going up to A (Excellent). These companies are also offering fixed annuity rates of over 4% for their various products, spread over different time durations, from three to 10 years. The companies are ranked based on their AM Best ratings, from the lowest to the highest.
Best Annuity Companies In the US
10. SILAC
AM Best Rating: B+ (Good)
SILAC is an insurance company based in Salt Lake City, Utah. It falls under the parent organization Sterling Financial Insurance Group. It was founded in 1935 and is Utah’s oldest active life insurance company. The company offers Medicare Supplement, Short-Stay nursing home, specified disease, and hospitality indemnity insurance alongside fixed annuity products through its network of agents.
AM Best has a B+ (Good) rating on SILAC as of 2023, indicating that the company’s overall financial performance is stable. The company offers two types of annuities to aid its customers in growing their retirement savings. These include fixed-index annuities and multi-year guarantees annuity products.
SILAC has a capital and surplus of about $6.8 billion in assets and $271.4 million in capital and surplus as of 2023. The company also offers top-tier rates for its fixed annuities. For Secure Savings Elite, SILAC’s two-year fixed annuity, the company offers a rate of 4.75% as of January 2023.
Metlife, Inc. (NYSE:MET), UnitedHealth Group Inc. (NYSE:UNH), and Markel Corporation (NYSE:MKL) are among some of the top American insurance companies that can meet most people’s insurance needs. However, those with a specific need for annuity contracts can depend on SILAC as a top annuity company.
9. Atlantic Coast Life
AM Best Rating: B+
Atlantic Coast Life is an insurance company based in Charleston, South Carolina. It was founded in 1925 and has since been providing life insurance and annuity products for families across the US. The company offers flexible and competitive products that can meet its clients’ needs as they evolve. Some of its annuity products include Safe Haven and Safe Harbor.
In 2021, Atlantic Coast Life’s total assets exceeded the $1 billion mark. Its gross annuity premium also exceeded $1 billion, while its capital and surplus was over $61 million. The company’s net operating income stood at $17.4 million. Through products like Safe Habor, Atlantic Coast Life offers its customers single premium-deferred annuities that earn a fixed interest rate. This allows client funds to grow on a tax-deferred basis.
Atlantic Coast Life offers highly competitive rates for its annuities. For Safe Haven, the company’s fixed annuity rate stood at 5.53% for the three-year option and 5.35% for the 10-year option as of January 2023. Compared to other annuity companies, this is the best rate offer for a three-year fixed annuity. Safe Harbor’s seven-year fixed annuity is also offered at a rate of 5.64% as of the same time.
8. American Life
AM Best Rating: B++ (Good)
American Life is an annuity company founded in 1951 by Bernard Rapoport. The company is based in Waco, Texas, and falls under its parent organization, Globe Life. It operates multinational to protect working families in the US, Canada, and New Zealand by offering life, accident, and supplemental health products.
In 2021, American Life paid 29,679 life claims. As of December 2021, the company had combined assets of $5 billion with over $81 billion of life insurance in force. AM Best placed an A (Excellent) rating on American Life in August 2022. The company’s three-year fixed annuity, American Classic, was offered at a rate of 5% as of January 2023.
American Life is a uniquely special annuity company because of its Special Risk Division. This provides one insurance product for children and organizations during sponsored group events. It helps American Life protect the most vulnerable customers while working with parents and organizations to reduce the risk of unpaid medical bills.
7. ASPIDA
AM Best Rating: A- (Excellent)
ASPIDA is an annuity company based in Durham, North Carolina. The company focuses on annuities, life insurance, and retirement planning options. It is backed by Ares Management Corporation, a leading global alternative investment manager.
The company offers fixed and fixed-index annuities to its customers. As of 2023, ASPIDA has about $5.7 billion in assets under management, over 200 years of industry experience in a leadership position, and over 125 employees. The company’s capital and surplus by 2023 stand at $21.8 million.
AM Best holds an A- (Excellent) rating on ASPIDA’s financial stability and performance as of 2023. The company also offers excellent rates for its fixed annuities. ASPIDA’s Synergy Choice, a three-year fixed annuity, is offered at a rate of 5.1% as of January 2023.
6. Oceanview
AM Best Rating: A-
Oceanview is an insurance company based in Phoenix, Arizona. The company focuses on providing high-quality retirement income products and services. Its products include multi-year guaranteed annuities (MYGA) and single premium fixed annuity contracts. The company falls under the authority of Oceanview Holdings Ltd., its parent organization.
Oceanview is rated A- (Excellent) by AM Best. This rating reflects the company’s balance sheet strength and its adequate operating performance. As of December 2021, Oceanview holds over $3.6 billion in assets and over $300 million in surplus funds. The company’s invested assets were recorded at $2.6 billion.
The company also offers attractive rates for its fixed annuities. As of January 2023, Oceanview’s Harbourview annuity was offered to customers at a rate of 5.1% for three years and five years each. The company thus offers competitive rates and has growth potential while being protected from market volatility. Oceanview also protects its customers’ principals, meaning customers will not lose money if the stock market goes down. The company also does not charge any fees or commissions.
While Metlife, Inc. (NYSE:MET), UnitedHealth Group Inc. (NYSE:UNH), and Markel Corporation (NYSE:MKL) are reliable insurance options, Oceanview also stands its ground in the more specialized segment of annuities today.
5. Fidelity & Guaranty
AM Best Rating: A-
Fidelity & Guaranty is a US-based insurance company founded in 1959. It primarily provides annuities and life insurance.
AM Best holds an A- (Excellent) rating on Fidelity & Guaranty as of 2023, signifying the company’s financial strength. As of January 2023, the company offers a rate of 5.4% for Guarantee-Platinum, its seven-year fixed annuity.
Fidelity & Guaranty offers three types of annuities to its clients. These are immediate annuities, fixed-index annuities, and multi-year guaranteed annuities.
4. Ibexis
AM Best Rating: A-
Ibexis, formerly known as SSL, is an annuity company with a new and exclusive focus on fixed annuities. The company was founded in 1937.
The fixed annuities offered by Ibexis offer fixed returns, easy-to-understand crediting strategies, and flexible payout options. The company offers multi-year guaranteed annuities, which are a more predictable type of fixed annuities, as their interest rate is fixed for the duration of the client’s contract with the company.
As of January 2023, Ibexis offered the best fixed annuity rate of 5.8% for its MYGA Plus, a five-year fixed annuity. AM Best currently holds an A- (Excellent) rating on the company’s financial performance.
3. Athene
AM Best Rating: A (Excellent)
Athene is an insurance company founded in 1896. The parent organization for the company is Athene Annuity & Life Assurance Company. The company issues, reinsures, and acquires retirement savings products. It is based in West Des Moines, Iowa.
Independent rating agencies like AM Best, S&P, and Fitch see Athene as a financially strong company with a stellar performance. All three agencies have placed positive ratings on the company as of 2022. They have placed ratings of A (Excellent), A+ (Superior), and A+ (Superior) on Athene’s financial strength, respectively. The company also offers some of the best fixed-annuity rates. For MaxRate, Athene offers fixed annuities of three, five, and seven years. The rates for these annuities are 4.7%, 5.35%, and 5.4%, respectively, as of January 2023.
The company’s latest financial highlights as of 2023 show that it holds $236.7 billion in total assets, $13 billion in gross organic inflows, and $2.7 billion in excess capital. In 2021, Athene generated $11.9 billion in funding agreement inflows and was the top issuer of funding agreement-backed notes with $11.1 billion of issuance across six currencies. It is among the best annuity companies in the US because it has multiple distribution channels to source its liabilities. These include retail, reinsuring in the annuity industry, and acquisitions and block reinsurance transactions.
2. Oxford Life
AM Best Rating: A (Excellent)
Oxford Life was founded in 1965 as an insurance company falling under U-Haul Holding, its parent organization. The company is based in Phoenix, Arizona. The company offers life insurance policies with no medical exams required and immediate approval for insurance applications during a customer’s point-of-sale interview.
The company is considered to be one of the best annuity companies in the US because of its single-premium policies and Medicare supplement coverage. Oxford Life also has excellent third-party ratings. For instance, AM Best has an overall rating of A (Excellent) on the company as of 2023. This signifies the company’s sound financial performance and strong claims reliability.
Oxford Life had about $2.9 billion in assets and $230.2 million in capital and surplus as of 2023. The company’s top business lines are annuities, life insurance, and insurance for accidents and health. These categories make up 80.52%, 13.32%, and 6.16% of the company’s business, respectively. For MultiSelect, Oxford Life offers rates of 4.95% for eight and nine-year fixed annuities and a rate of 5% for its 10-year fixed annuity as of January 2023.
1. Americo
AM Best Rating: A
Americo, an annuity company falling under United Fidelity Life Insurance Company, is based in Kansas City, Missouri. It was founded in 1946.
Americo specializes in providing two primary annuity types: fixed-index and multi-year guaranteed annuities.
The company offers competitive rates for its fixed annuities. As of January 2023, Americo’s American Pathway, a four-year fixed annuity, was offered at 5.15%. Another product, Platinum Assure, which is a six-year fixed annuity, was offered at a rate of 5.45% at the same time.
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Disclosure: None. 10 Best Annuity Companies In the US is originally published on Insider Monkey.
