Annuity Industry No Longer Waiting Out The Storm
January 13, 2016 by Linda Koco
What to make of annuity trends in in 2015? Here is a look-back in four key areas. The overall picture is one of an industry actively engaging in developing its business. No more sitting in a cave, waiting out an economic storm.
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Annuity distribution
One change that annuity professionals keep buzzing about is this year’s rise in FA sales at banks and broker/dealers (B/Ds). The increase is especially noticeable in the FIA product line, in which neither banks nor B/Ds had shown much interest previously.
In the third quarter, for instance, bank sales of FIAs represented 18.9 percent of total FIA sales, according to Wink Inc. That’s up from 10.5 percent in second quarter. As for B/Ds, full-service national and independent B/Ds combined took an FIA market share of nearly 17 percent in the third quarter, up from nearly 15 percent in second quarter, according to Wink’s figures.
Regarding FA sales that are not indexed, banks have been active in this market for several years and they seem to be staying there. In third quarter, for instance, banks represented nearly 49 percent of this market’s distribution, according to Wink, which began publishing traditional FA sales data earlier this year. As for B/Ds, the national and independent firms combined produced nearly 12 percent of the traditional FA sales in the third quarter.
Similar trends, although with slightly higher percentages, showed up in multi-year guarantee annuity (MYGA) sales at banks and B/Ds, according to the Wink data.
The year’s stock market volatility and continuing low interest environment may have nudged banks and B/Ds to consider offering FIAs as well as traditional FAs and MYGAs to conservatively-minded customers. Some of the newer FIA designs may have caught their eye too. For whatever reason, these two channels are now “on” to annuities.
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