As Annuity Sales Surge, Industry-Watchers Fret Over Weak Broader Growth
October 11, 2023 by Warren S. Hersch
Sheryl Moore, CEO of Wink and Moore Market Intelligence, said in an email that banks have taken on a greater share of multi-year guaranteed annuities because of the products’ simple design. The products account for nearly 40% of deferred annuity sales, she said.
The trendline in sales has entailed challenges for independent marketing organizations, a main distribution channel for sales of fixed annuities, she noted.
“Marketing organizations are having to look for ways to retain their spread” — the difference between gains on investments and crediting rates paid to policyholders — “now that lower-compensation MYGAs are selling more,” Moore said. “As interest rates climb even higher, it will be interesting to see how these distributors protect their margins.”
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