ID Trends Summer 2022 - Page 31

SUMMER 2022 31
Specifically , regarding developing new indices , the most prolific trend in indexed annuities is the adoption of hybrid indices ; indexes that consist of two or more other indices , plus a cash or bond component . These hybrid indices are often proprietary , generally customized , and typically volatility controlled . They are also often developed the day the indexed annuity is featured on goes-tomarket . Hybrid indices give the marketer the ability to promote indexed annuities as offering “ unlimited ” potential for gains , due to favorable options pricing because of the index ’ s lack of history .
As a direct result of hybrid index development , we are also seeing an uptick in the number of term end point indexing methods being offered . This indexing method , also known as a long-term point-to-point strategy , has historically shown to have a higher propensity for gains than more liquid indexing methods such as annual point-to-point .
Annuity Trends continued on page 32
Traditional fixed annuity sales
$ 15,000
$ 10,000
$ 5,000
( in millions )
$ 3,936 $ 6,124 $ 5,926
$ 10,828 $ 8,814
$ 7,228 $ 6,636
$ 9,045
$ 7,915 $ 6,664 $ 6,747
$ 8,185 $ 10,341
$ 11,216 $ 12,590
$ 14,759
$ 12,461
$ 9,747 $ 9,136
$ 9,968 $ 12,524
$ 16,646
$ 13,221
$ 13,287
$ 14,434
$ 11,516 $ 11,219
$ 14,597
$ 0
2015 2016 2017 2018 2019 2020 2021 2022
Fixed annuity sales by distribution channel
39.2 % Bank
13.7 % Independent Agent
% Registered investment advisor
0.1
% Direct response
0.1
5.7 % Career
3.3 % B / D : Independent
38 % B / D : Full service national