Before the 2008 financial crisis, guaranteed benefits were a typical part of annuities. Now, those benefits have been drastically reduced or eliminated, and many key players, including Hartford Financial Services Group and Sun Life Financial, left the business.

Who is still standing? Prudential and MetLife. "We're proving as an industry and at Prudential that regardless of capital markets, equity or interest rates, we can create products that work in balance for the consumer, advisor and our shareholders," said Bruce Ferris, head of sales, distribution, product and marketing with Prudential Annuities.

MetLife has cut benefits on new products and scaled back its advisor force by a third. Prudential has also made changes.

"We've moderated our sales, and that's been widely publicized relative to our earnings results each quarter," Ferris said at a Wednesday evening media dinner that Prudential Annuities hosted in New York.

Bumping up against protracted low interest rates, several insurers offered their variable annuity owners buyouts or insisted they move into investments with lower returns.

Prudential has chosen to innovate instead. "Our strategy is to diversify our growth, which means developing products that work in response to changing capital market environments," Ferris said.

Despite the fact that low interest rates have made annuities money losers for many insurers, Prudential has succeeded with a number of products. One is a variable annuity: Prudential Defined Income annuity that invests in fixed-income bonds.

"We believe that a diversified growth strategy will serve our clients and shareholders, and it will include variations of fixed-income annuities, such as fixed-index annuities and deferred-income annuities," Ferris said. "We believe in the underlying economic value of the business."

In 2009, Prudential was still among the companies offering generous guarantees on variable annuities. "While we have made moderate adjustments in keeping with the economic environment, their value proposition remains intact," Ferris said. "The important question is compared to what? Our 7 percent roll-up rate was available when the 10-year Treasury was at 5 percent.  Now our 5 percent roll-up rate is available with a 2.5 percent, 10-year Treasury rate. That suggests positive client value."

Although the Hartford and Sun Life recently sold their annuity businesses, Prudential is betting that annuities will become more appealing to baby boomers, who are expected to retire in droves in coming years. The 65-and-over population grew 18 percent between 2000 and 2011 to 41.4 million, according to a recent Administration on Aging report.

"Certainly, there are fewer traditional names in the top 10 providers of variable annuities, which only means that there's room now for new entrants," Ferris said. "We've seen private equity companies come into annuities because they see the scarcity of supply and a growing demand."

He added that the demand for Prudential’s products and services is continuing to increase. “More and more, people are looking for certainty of income in retirement, which requires us to be innovative to meet that demand," Ferris said. "The evolving world of deferred-income annuities, fixed- and equity-indexed annuities suggests growth and opportunity."

One example he cited was single-premium immediate annuities (SPIA). "A SPIA always pays the highest level of initial guaranteed income. They are gaining in popularity because people recognize the other choices, which include a laddered bond portfolio of fixed income, pay historically low interest rates of less than 100 basis points," said Ferris.