Well, it's been a month or so since the rather surprising announcement by Genworth Financial that they were going to close down their structured annuity division at the end of August, and thus removing a couple of the great names of the settlement industry, First Colony Life and Mayflower Life, from the roster of markets.

In the emails and phone calls i've had with various industry people, brokers, company reps, etc, there we a couple of major themes that ran through their observations.

1. The announcement totally came out of the blue. Typically you can see some of this coming, either as a result of an investment downgrade, merger, business reversal or a prolonged period of poor pricing. None of those were the case with Genworth as their pricing had been reasonably competitive, their financial's were strong and they had come out of their spin off from GE Capital with generally very good reviews.

 2. People are were expecting some contraction of the market, but Genworth was not a name anyone tossed out as a likely candidate to stop writing structures. With Genworth making a very strong push on the variable and fixed annuity business it would have seemed to be a natural to keep the structured annuity side running, but clearly the management at Genworth didn't like their margins, or more likely the prospects for growth, and decided it was better off placing it's resources elsewhere.

3. Genworth's withdrawal high lighted the issue that is facing our industry, and that is that we are not on a plateau, but we are in fact contracting. With each quarter it become more and more apparent that other financial vehicles such as trusts, variable annuities, mutual funds, banks, etc, are capturing most of the cash in settlements. If the only growth a life market can get is from cannibalizing premium from other markets, that's not a healthy allocation of resources and will eventually lead to a life company taking a hard look at their reasons for staying in a market.

As I have told others, I wasn't surprised a market decided to leave, but I was surprised it was Genworth. I still expect before year end we will have at least one more announcement regarding a market leaving. The Companies still writing settlement annuties are:

Allstate Life, American General, Aviva, Fidelity & Guarantee, Hartford Life, John Hancock, Liberty Life, Mass Mutual Life, Met Life, NY Life, Pacific Life, Prudential, Symetra and Travelers. Which one will decide to pull out next is pretty much anyone's guess.