Apollo Global Management Investor Day Presentation Deck
FAQ: Will a Significant Amount of Consumers Surrender
Their Policies in a Rising Interest Rate Environment?
Considerations
for Impact
of Rising
Interest Rates
on Annuity
Surrenders
1
Structural
Protections
Surrender charges (which are
typically 5-10% of contract value)
provide structural protection
from withdrawal in the early
years of an annuity policy
• Many policies are also covered by
a Market Value Adjustment (MVA)
provision while in their surrender
charge period, which means that if
interest rates are higher at the
time of withdrawal versus when
the contract was purchased, a
negative MVA will apply
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022
●
2
Fee-Averse Consumers
& Suitability
Consumers are historically very
averse to paying surrender
charges
. In addition, advisors and agents
who recommend annuities to
consumers must provide detailed
suitability documentation, which
would discourage advising a
policyholder to absorb surrender
charges and then obtain a new
contract or product
●
3
High
Predictability
Athene's historical annual
withdrawal rate has averaged
~9% historically, with a very low
standard deviation of ~1%
Industry data points to a similar
~9% average surrender rate for
annuity products over time,
dating back nearly twenty years
63View entire presentation