When it comes to retirement products, index annuities don’t often make headlines for innovation. Corebridge Financial and Market Synergy Group (MSG) are looking to change that with the launch of Power Select AICO, a new entry in Corebridge’s Power Series of Index Annuities that comes with a unique twist: an Additional Interest Credit Overlay capable of doubling credited interest over five years.

It’s a feature Corebridge says no other index annuity currently offers—a bold claim in a sector known for incremental change. The pitch is simple: in sluggish or volatile markets, when traditional growth engines stall, the AICO overlay can automatically multiply eligible earnings by 200%, capped at 30% of net premiums.

“Through its unique interest credit overlay, Power Select AICO can step up earnings by a multiple of 200%, providing important opportunities for growth and diversification,” said Bryan Pinsky, President of Individual Retirement and Life Insurance at Corebridge.

The Mechanics

Like other index annuities, Power Select AICO links returns to benchmarks such as the S&P 500, Nasdaq-100, or a curated set of multi-asset, risk-managed indices. There’s also a fixed interest account for guaranteed growth. The overlay works by calculating credited interest from these accounts over five years, then applying a multiplier—potentially delivering double the interest, assuming markets cooperate.

Protection is a key selling point: assets are insulated from direct market losses, making this a play for growth without sacrificing principal. That said, there’s a cost: an annual 0.80% fee for the first five years. In weak markets, the overlay can help offset this fee; in strong markets, investors may rely more on raw index gains than the multiplier.

Competitive Context

Index annuities have been a staple for conservative investors looking for market-linked growth without exposure to full downside risk. But with rates fluctuating and equity markets entering choppier waters, insurers are layering in creative crediting methods to stand out. The AICO overlay could position Corebridge ahead of competitors like Allianz or Athene, who have rolled out their own “boosted” annuity features but without the same 200% multiple structure.

Lance Sparks, President of MSG, frames it as versatility in any climate:

“In down markets, the new index annuity offers 100% protection. In weak markets, the overlay can boost earnings by up to 200%. And in strong markets, assets can grow with a percentage of the index gains.”

The Power Select AICO isn’t a game-changer for every investor—it’s still a long-term insurance product with liquidity constraints, tax implications, and fine print that should send any buyer to their advisor. But in a market hungry for ways to eke out better returns without betting the farm, it’s a notable move in the index annuity arms race.

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