The SVIA-LIMRA Stable Value Sales and Assets Survey demonstrates the durability of stable value funds. The biannual Sales and Assets survey differs from other Association surveys, not only because it is conducted in partnership with LIMRA, but also because of the survey respondents. Most SVIA surveys focus on stable value managers. The Sales and Assets Survey respondents are the bank and insurance company issuers of stable value contracts. Because it looks at the industry through a different lens, the Sales and Assets Survey serves as yet another measure of the resiliency of stable value.
This Sales and Assets Survey looked at stable value during one of the most difficult periods for financial markets in our country’s history. Participants were asked to provide information for an interval that began in the Fourth Quarter of 2007 when the financial crisis started, continued through the resulting Great Recession, and ended in mid-2012. Like other SVIA surveys, issuer participation may vary in each survey so some fluctuations in the data may be a result of this variation rather than an underlying trend or change.
Looking at the Sales and Assets Survey data from the Fourth Quarter of 20071 through the First Half of 2012, reported stable value assets grew from $290 billion to $379 billion (up 31 percent).
The Sales and Assets Survey also highlights not only the returning prominence of insurance companies as issuers but also the increasing reliance on the insurance sector to provide a diversity of products: general account GICs, Separate Account GICs, and Synthetic GICs managed by an issuer’s company or affiliate as well as Synthetic GICs not managed by an issuer’s company or affiliate. While this last sector dominated stable value prior to the crisis, and it still commands $217 billion in stable value fund assets according to SVIA’s Stable Value Funds’ Investment and Policy Survey2, in terms of new sales this sector has now been bested by stable value contracts that are both issued and managed by an insurance company or its affiliate. The Annual Stable Value Funds’ Investment and Policy Survey also supports this observation by reporting that assets managed by insurance companies grew by 20% from 2010 to 2011 to $282 billion.3
Lastly, the Sales and Assets Survey also illustrates the industry’s efforts to address capacity constraints caused by the financial crisis. The Stable Value Contracts chart shows that the stable value contract issuers have provided capacity throughout these uncertain times by providing a diversity of products. The chart also shows how much of this capacity is from insurance company issuers (General Account GICs and Separate Account GICs as well as Synthetic GICs managed by issuer’s company or affiliate). The chart shows how contract capacity constricted in 2008 through 2010 and began to increase again heading into 2011 as new issuers, some bank issuers, and insurance company issuers brought capacity to the industry.
1 The Fourth Quarter of 2007 was the last time the SVIA-LIMRA Stable Value Sales and Assets Survey data was conducted on a quarterly basis. Beginning in 2008, the Sales and Assets Survey became a biannual survey. 2 SVIA’s Stable Value Funds’ Investment and Policy Survey surveyed 33 stable value managers by the type of stable value fund under management. The survey reported total stable value fund assets under management of $645.6 billion as of December 31, 2011. 3 Ibid.