ID Trends Winter 2022 ID Trends Winter 2022 | Page 17

WINTER 2022 17

Riders continue to rise

We have seen an uptick in the development of Guaranteed Lifetime Withdrawal Benefit ( GLWB ) riders , on indexed annuities , as well as structured and variable annuities . These riders guarantee that the purchaser will receive a guaranteed income stream for their life , while maintaining the flexibility to start / stop / change withdrawal amounts under the terms of their annuities . Guaranteed Minimum Death Benefit ( GMDB ) riders pay an enhanced benefit upon the death of the annuitant ( or owner ). These riders have been a focus of variable annuity product development over the past couple of quarters . On the fixed and indexed annuity fronts , bailout riders have made a comeback . These benefits allow the annuitant to cash surrender their annuity , penalty-free , should the credited rates / caps / participation rates fall below a set rate , upon renewal . These riders often overcome the “ trust me ” mentality of inforce renewal rates on non-variable annuities
All deferred annuity sales by quarter
$ 70,000
$ 60,000
$ 50,000
$ 40,000
$ 30,000
$ 55,198
( in millions )
$ 58,271
$ 55,207
$ 53,334
$ 52,705
$ 45,911
$ 54,217
$ 56,315
$ 58,395
$ 64,492
$ 59,890
$ 60,925
$ 59,716
$ 72,804
$ 20,000
$ 10,000
$ 0
1Q ‘ 19
2Q ‘ 19
3Q ‘ 19
4Q ‘ 19
1Q ‘ 20
2Q ‘ 20
3Q ‘ 20
4Q ‘ 20
1Q 21
2Q ‘ 21
3Q ‘ 21
4Q ‘ 21
1Q ‘ 22
2Q ‘ 22
All deferred annuity sales

Next train arriving ?
. 7 %
Fixed annuities
26.9 % Indexed annuities
36.1 % Multi-year annuities
21.9 % Variable annuities
14.5 % Structured annuities
Lastly , we are seeing a huge focus on advisory annuities : fixed , indexed , structured and variable alike . These annuities do not pay a commission to the salesperson , but often allow for a fee to be deducted from the contract , for asset management purposes . All indicators point to the Registered Investment Advisor being the greatest new opportunity of the decade , in terms of annuity distribution . Insurance product manufacturers are catering to that belief in their new product development . However , with only 2.21 % of new sales occurring through fee-based products , one has to wonder when the new distribution train will be arriving .