Luanna Teo, Vice President of Brand Development at Knighthead Annuity & Life Assurance Company, presented a compelling case for the evolving role of fixed-income investments, particularly annuities, in wealth management. Her insights at the Hubbis Wealth Planning & Structuring Forum - Singapore 2026 offer a fresh perspective on how financial advisors can better serve clients seeking stability and defined outcomes in an increasingly volatile market.
The Shift in Fixed Income
Teo begins by acknowledging the changing landscape of fixed income. Traditional tools like bonds, bond funds, ETFs, ladders, and deposits have their merits, but recent market conditions have exposed limitations. Bond funds, for instance, can be vulnerable to mark-to-market volatility, while bond ladders require significant scale and ongoing management. Deposits, while providing comfort, may limit flexibility when used too narrowly.
This shift in the market highlights a critical point: clients are not always asking for specific products like bonds. Instead, they are seeking outcomes such as dependable income, risk management, capital preservation, or confidence around retirement. This realization should prompt financial advisors to rethink their approach and prioritize client outcomes over product labels.
The Rise of Annuities
Annuities, traditionally associated with retirement planning, are gaining traction for a variety of reasons. Teo points out that global annuity sales have been on the rise, with US retail annuity sales reaching USD 461.3 billion last year. This growth is driven by demographics, an aging and asset-rich population, and a growing demand for guaranteed lifetime income. Knighthead, in particular, has seen significant momentum in international markets, with USD 2 billion in sales over the past eight months, led by China, Japan, and Taiwan.
At the heart of annuities are contracts designed to provide guaranteed returns or income streams. Knighthead's annuities are principal-protected and can support estate planning through beneficiary nomination, including for American beneficiaries of non-American policy owners. This flexibility and relevance extend beyond retirement planning, making annuities a valuable addition to diversified income portfolios.
Knighthead's Platform and Products
Knighthead Annuity & Life Assurance Company, established in 2014 in the Cayman Islands, operates within the broader Knighthead Insurance Group. Teo emphasizes the platform's robust support for its fixed annuity products. Client assets are held through a segregated master trust structure, administered by Ocorian Trust and custodied with Goldman Sachs Bank and J.P. Morgan. This arrangement ensures policyholders are trust participants, and Knighthead does not directly hold client assets.
The company's financial strength is underscored by its audited financial statements, AM Best A-minus financial strength rating, KBRA A rating, and conservative investment approach. Knighthead's portfolio, managed on an asset-liability matching basis, includes over 1,500 positions and does not permit leverage. The company's capital base, crossing USD 8 billion in assets under management in March 2023, further reinforces its financial stability.
Knighthead offers three main annuity solutions: multi-year guaranteed annuities (MYGAs), fixed-index annuities, and single premium immediate annuities. MYGAs provide a fixed guaranteed rate over a selected term, typically three to 10 years. Fixed-index annuities allow clients to participate in equity indices while protecting principal. Single premium immediate annuities are designed for retirement income planning, offering guaranteed income payments over a defined period or for life.
Practical Applications and Guarantees
Teo provides practical examples of how these products can work for clients. The Knighthead Safe Harbour product, for instance, offers fixed rates of 5.35% for three years, 5.75% for five years, 5.85% for seven years, and 6% for 10 years. Fixed-index annuities, like the Navigator policy, provide S&P 500 caps of 10% for five years and 10.25% for seven years. These products include features such as penalty-free withdrawals, death benefits, and beneficiary nomination.
The key takeaway is that these figures are guaranteed, not just projections. Traditional insurance illustrations may show higher but non-guaranteed returns, and some products can reach breakeven in as little as 15 months. This practical consideration is crucial for clients concerned about lock-up, liquidity, and insurance-style breakeven periods.
The Advisory Lens: Focusing on Certainty
In conclusion, Teo emphasizes the importance of viewing annuities through the lens of client outcomes. When clients ask for fixed income, they are often seeking certainty, dependable income, and a clearer path to future financial confidence. Knighthead's annuity solutions, with their principal protection, guaranteed returns, asset-liability matching, and robust structure, are designed to address these outcomes.
For financial advisors, this means assessing annuities as part of a comprehensive toolkit for income and capital preservation. While not suitable for every client or allocation, annuities can be a valuable tool when the client's priority is a defined outcome rather than market exposure alone. This shift in perspective can help advisors better serve clients in an increasingly uncertain world.
