Aviva eyes guarantee wrapper with managed account or 401(k)

Although Aviva USA Corp. already has an established strength in its lineup of indexed products, the insurer has its eye on the next innovation: a guarantee wrapper with a managed account or 401(k), according to chief executive Christopher J. Littlefield.

“We have strength with our indexed products and a strong profile with independent agents,” he said in an interview last week. Mr. Littlefield said that managed ac-counts or 401(k)s with a guarantee wrapper are “the wave of the future” in retail and institutional markets.

The insurer is exploring options as to which asset managers it may pair with to provide that option, and at the moment, there isn’t a timeline for when Aviva would come out with such a product, he said.

Aviva, the top seller of indexed-annuity and indexed-life products in the second quarter, according to Advantage Group Associates Inc., also has an eye on the Securities and Exchange Commission’s Rule 151A, which would designate those indexed annuities as securities.

“With 151A, we need to be prepared to defend the franchise,” Mr. Littlefield said. “We’re committed to independent agents, and we’ve done well focusing on them.”

Competition against other pro-viders if indexed annuities became recognized as securities would mean registering the products and fostering agreements with broker-dealers, but many of those who sell Aviva’s products are already registered representatives.

Designating the product as a security could be a boon for Aviva, too, Mr. Littlefield said.

“With a registered product, there’s greater flexibility in product design,” he said.

Last week, Aviva be-came listed on the New York Stock Exchange, a crucial step in London-based parent Aviva PLC’s plan to establish a greater presence stateside, where some 20% of its shareholders are based, said Mr. Littlefield, who became chief executive of Aviva USA last month. The company is poised to take on competitors here, he noted.

“There’s an appetite for new players in the [insurance] market, a desire for companies that want to continue growing, whether that’s distribution or customers,” Mr. Littlefield said. “The initial focus now is on organic growth.”

E-mail Darla Mercado at [email protected].