Luanna Teo, Vice President of Brand Development at Knighthead Annuity & Life Assurance Company, presented a compelling case for the role of fixed-rate annuities in supporting defined client outcomes at the Hubbis Wealth Planning & Structuring Forum - Singapore 2026. Her presentation, 'From Fixed Income to Certainty: Using Annuities to Support Defined Client Outcomes', challenged the traditional view of fixed income and highlighted the importance of understanding client needs beyond product categories. Luanna's central argument was that annuities can provide a valuable tool for clients seeking defined outcomes, particularly in a market shaped by uncertainty and volatility.
The Changing Fixed Income Landscape
Luanna began by acknowledging the changing nature of fixed income conditions. While traditional tools like bonds, bond funds, ETFs, ladders, and deposits remain useful, the past five years have exposed limitations around volatility, reinvestment risk, scale, and flexibility. This has led to a reevaluation of the fixed income conversation, with a focus on outcomes rather than product labels.
Outcomes Over Products
The key takeaway is that clients asking for fixed income may have different priorities than what is traditionally offered. They may seek capital preservation, predictable cash flow, lower portfolio volatility, diversification away from equities, or greater confidence approaching retirement. Luanna emphasized that the question should not be about recommending a specific fixed income product but rather understanding the client's desired outcome.
Annuities as a Complementary Tool
Annuities, according to Luanna, can complement structured products and conventional fixed income instruments. Fixed-rate and fixed-index annuities offer principal protection, guaranteed returns, and income streams, providing a stable and predictable component to a client's portfolio. This is particularly relevant in a market characterized by inflation shocks, rapid rate changes, geopolitical disruption, and AI-related valuation shifts.
Global Demand and Knighthead's Momentum
The global demand for annuities is rising, with US retail annuity sales reaching USD 461.3 billion last year and USD 104.6 billion in the first quarter of this year. Knighthead Annuity & Life Assurance Company has seen significant momentum, recording USD 2 billion in sales over the past eight months, with China, Japan, and Taiwan as its strongest markets. Luanna attributed this success to the company's focus on principal protection, financial strength, and a range of annuity products.
Knighthead's Platform and Product Offerings
Knighthead's platform is designed to support its annuity products. Client assets are held through a segregated master trust structure, ensuring independent custody and audit arrangements. The company has an AM Best A-minus financial strength rating and a KBRA A rating, with no leverage and asset-liability matching. Knighthead offers three main annuity solutions: multi-year guaranteed annuities, fixed-index annuities, and single premium immediate annuities.
Flexibility and Guaranteed Outcomes
Selected products include features like penalty-free withdrawals, death benefits, and beneficiary nomination, including for estate planning. Luanna stressed that the policy examples provided are guaranteed figures, not projections, and that certain products can reach breakeven in around 15 months. This flexibility and guaranteed outcomes make annuities an attractive option for clients seeking stability and defined outcomes.
Rethinking the Fixed Income Conversation
Luanna concluded by emphasizing the importance of rethinking the fixed income conversation. Advisers should assess annuities as part of a broader income and capital preservation toolkit. While not suitable for every client, annuities can be relevant when the client's priority is a defined outcome rather than market exposure. This shift in perspective allows advisors to better meet client needs in an uncertain and volatile market environment.
