American General Life Insurance Co. Power 5 Protector Annuity Review

Introduction

Fixed Index Annuities are contracts between the annuitant and an insurance company in which the insurance company pays interest based on the performance of a certain stock market index. Fixed Index Annuities have an inbuilt capital protection feature, so your principal will remain safe even if the index goes down.  Annuities are complex products, and many advisors often do a poor job of relating the complexities to their customers.  And worse, often do not take the customers full financial context into consideration when making their sales pitch.  It is imperative to educate yourself on these products and not solely depend upon the annuity agent’s oversimplified and uncontextualized sales pitch.

In this article, we delve into the American General Life Insurance Company’s Power 5 Protector series of indexed annuities. The Power 5 Protector, “can help you grow your retirement assets, while also guaranteeing that your principal will never decline due to market volatility.4”  Following comprehensive due diligence, this report aims to present an objective analysis of this financial product.

Company Info

The Power 5 Protector Annuity is issued by the American General Life Insurance Company which is a now a part of Corebridge Financial1 (formerly AIG Life & Retirement).  Corebridge was spun off AIG in 2022 and was listed the same year on the NYSE: CRBG.  As of the end of 2022 they managed or administered $357.2 billion in client assets.  According to their 2022 annual report2, “For the year ended December 31, 2022, our businesses generated spread income of $3.3 billion, fee income of $2.1 billion and underwriting margin of $1.4 billion, resulting in a balance mix of 49%, 31% and 20% respectively, among these income sources.  We are well-diversified across our operating businesses with our Individual Retirement, Group Retirement, Life Insurance and Institutional Markets businesses representing 30%, 15%, 27% and 23% of total adjusted revenue, respectively, for the year ended December 31, 2022.”

Financial Strength and Credit Ratings3