Brighthouse Hints at Life Insurance Revamp, Touts Annuity Sales
August 1, 2017 by Jamie Johnson
New life insurance products could be on the way at Brighthouse Financial, as the company prepares for a revamp of its life business. A new SEC filing this week is scant on details, but hints at changes ahead. The 8-K filing also shares details on the company’s Shield Level Selector SM Annuity sales, which continue to gain momentum.
Brighthouse has already stopped selling many of the legacy life insurance products it inherited in its spinout from MetLife. Brighthouse manages in-force policies that were on MetLife’s books, but in previous filings the company has communicated that is is suspending new sales of universal life secondary guarantees and participating whole life insurance. Beginning in the first quarter, the company turned its focus squarely on selling term life and universal life without secondary guarantees.
As a result of those changes, Brighthouse life insurance sales were down $6 million, to just $11 million in the second quarter. That was expected, the filing says, and is “consistent with our strategy of migrating away from products such as participating whole life to simpler client solutions.”
With those changes in effect, new life insurance products are on the way, though Brighthouse has not shared a timeline for new launches. The 8-K filed this week notes only that “as a stand-alone, public company, we plan to revamp this business over the coming years.”
Brighthouse is a large player in the life insurance and annuities markets, with 1.4 million policies in-force and roughly $653 billion in life insurance face amount in-force, as of year-end 2016. Given its size, and its new independence from MetLife, competitors are watching for details on the strategic direction the company takes with its life insurance and annuities businesses.
Brighthouse Annuity Sales Gain Momentum
Updates in the company’s 8-K filing show that annuity sales remain strong. Total annuity deposits for the three months ended June 30, 2017 were $995 million, a 7% increase over the first quarter, according to the filing.
The increase “was driven by strong sales of Brighthouse Shield Level Selector SM Annuity, with sales in the three months ended June 30, 2017 totaling $570 million. That brings 2017 year-to-date sales to over $1 billion.
Brighthouse continues to launch new products under the Shield Level brand. As reported, in May Brighthouse launched the Shield Level 10 annuity. The carrier designed the index-linked, single premium deferred annuity in response to distributor requests for a Shield Level Selector product with streamlined features and options.
That product offers annuity holders a choice of investing in the S&P 500 Index, Russell 2000 Index or MSCI EAFE Index and lets customers choose annually whether to switch index investments. The annuity holder can capture gains in the indices up to a cap, but is protected from the first 10% of index loss.
The new annuity includes a return of premium death benefit. This is one of the features that makes the product more streamlined than other Shield Level Selector products, the company says.
The Brighthouse spinout from MetLife took effect July 19, with shares expected to be distributed Aug. 4. As part of the spinoff, shareholders of MetLife common stock will receive one share of Brighthouse common stock for every 11 shares of MetLife they hold.
