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 focused on the evolving fixed income landscape and the need for financial advisors to shift their mindset from product categories to client objectives. Teo argues that annuities are not meant to replace traditional fixed income instruments, but rather to provide an additional tool for clients seeking defined outcomes.
Teo highlights the changing nature of fixed income conditions, noting that traditional tools like bonds, bond funds, ETFs, ladders, and deposits have limitations in terms of volatility, reinvestment risk, scale, and flexibility. She emphasizes that clients often seek more than just fixed income; they desire capital preservation, predictable cash flow, lower portfolio volatility, diversification, or retirement confidence. This realization prompts advisors to prioritize client outcomes over product labels.
Annuities, Teo explains, have been gaining traction globally, particularly in the US, where retail annuity sales reached a staggering USD 461.3 billion last year. This surge in demand is attributed to demographics, an aging and asset-rich population, and the need for guaranteed lifetime income. Knighthead, a company Teo represents, has seen significant momentum in international markets, recording USD 2 billion in sales over the past eight months, with a strong presence in China, Japan, and Taiwan.
The core of annuities, according to Teo, lies in their ability to provide guaranteed returns or income streams. Knighthead's annuity solutions are designed to offer principal protection and support estate planning through beneficiary nomination, including for American beneficiaries of non-American policy owners. While annuities are often associated with retirement planning, Teo argues that they can also serve clients seeking diversified income sources or guaranteed returns alongside other investments.
Knighthead Annuity & Life Assurance Company, established in 2014 in the Cayman Islands, operates within the broader Knighthead Insurance Group. Teo emphasizes the company's robust platform, which includes a segregated master trust structure, independent custody, and audit arrangements. Knighthead's financial strength is underscored by its AM Best A-minus rating and KBRA A rating, with a conservative investment approach and a portfolio managed on an asset-liability matching basis.
The company offers three main annuity solutions: multi-year guaranteed annuities (MYGAs), fixed-index annuities, and single premium immediate annuities. Teo provides practical examples of how these products can deliver guaranteed outcomes, such as the Knighthead Safe Harbour product, which offers fixed rates of 5.35% to 6% over various terms and fixed-index annuities with S&P 500 caps of 10% to 10.25%.
In conclusion, Teo challenges advisors to view annuities as part of a comprehensive income and capital preservation toolkit. While annuities may not be suitable for every client or allocation, they can be valuable when the client's primary objective is a defined outcome, rather than market exposure alone. This shift in perspective allows advisors to better serve clients seeking stability and certainty in an uncertain financial world.
