Edward Jones is once again doing business with American International Group (AIG) after a two-year sales suspension in the insurer’s popular retirement product.
Another sign of AIG's continuing rebound from the financial crisis is the reinstatement of variable-annuity sales for AIG's Sun America Financial Group by St. Louis-based Edward Jones.
The decision by Edward Jones, one of SunAmerica's biggest distribution partners before the crisis, could help SunAmerica's efforts to boost sales of a core product at a time when the variable-annuities business has become increasingly concentrated over the past two years. But the move comes as advisers have been directing variable-annuity clients to a handful of SunAmerica's biggest and strongest rivals, with nearly half the sales now in their hands.
Variable annuities provide a tax-advantaged way of investing in stock and bond funds, and many guarantee streams of lifetime payments.
SunAmerica Financial Group, which encompasses all of AIG's U.S. life-insurance and retirement-services units, also sells life insurance, investments, and fixed annuities; the group now generates half the earnings of a restructured AIG.
Before the AIG bailout, Edward Jones representatives generated more than a third of SunAmerica's sales of variable annuities, the insurer has said. The brokerage suspended new sales of SunAmerica variable annuities in February 2009, when AIG was struggling to repay its bailout funds.
The reinstatement follows AIG's completion of an agreement with the government earlier this month, under which the insurer repaid its debt to the Federal Reserve Bank of New York and positioned the Treasury to begin selling a 92.1% stake in the com