ID Trends Summer 2022 - Page 30

30 ID Trends NAILBA
Annuity Trends :

Put your thinking cap on :

Innovation in annuity products

Unlike life insurance product development , the annuity market always seems to have something going on . New features and different riders come and go . The array of available options seems to be endless . Here , we lay out some of the latest trends in annuity product development .
With interest rates being as low as they are , fixed annuities are relatively difficult to market . This has resulted in a couple of fixed annuity underwriters developing indexed “ kickers ” on their fixed annuities . Also , many indexed annuities have developed “ buyup ” caps and participation rates . This works similar to traditional indexed crediting , but the client pays an explicit annual fee of
[ 1.00 %], in exchange for relatively higher caps and participation rates than an indexing method with no fees .
Meanwhile , structured annuities are developing new ways of offering indexed interest . Because of the product immaturity in these 10-year-old products , we are still seeing new indexing methods being introduced ; new indices being developed , and even new ways of limiting the indexed interest being utilized .
Fixed annuity sales by distribution channel
35.4 % Independent Agent
34.5 % Career
0 % Registered investment advisor
0.1 %
Direct response
10.5 %
B / D : Independent
Traditional fixed annuity sales
12.6 % Bank
6.9 %
B / D : Full service national
$ 3,000
$ 2,500
( in millions )
$ 2,000
$ 1,500
$ 1,000
$ 500
$ 0 2015
2016 2017 2018 2019 2020 2021 2022