According to a recent article on InsuranceNewsNet.com, the lower sales numbers for annuities in 2017 over 2016 look to continue in 2018. This is not a new trend for annuities, but certainly one of concern to insurers and may be at the root of recent announcements by carriers to exit the business. Interestingly, the need to save for retirement and have secure income in retirement is only increasing as fewer and fewer people who are reaching the age of retirement have a traditional defined benefit plan. This growing need for guaranteed income may be the key driver for the rise in annuity product riders and, in particular, the guaranteed minimum withdrawal benefit riders, as also noted in the article. Taking note of these market changes and, more importantly, variations in customer behavior will be critical to carriers as they look to overcome the annuity market headwinds. Carriers will need to gather business and customer insight more frequently and learn how to implement changes to capture new customers and provide the products that are needed today and in the future.
In reacting to the annuity market headwinds and the growing need for solutions to support savings and guaranteed income through retirement, the Insured Retirement Institute recently published its 2018 Retirement Security Blueprint report, which outlines several key suggestions or requests for members of congress and the White House to add as policy. Specifically the IRI is suggesting tax advantages for guaranteed income annuities to help Americans and to reduce the strain on Social Security and other entitlements. Other suggestions include supporting annuity rollovers, reducing the age requirement for in-service rollovers, and changing the required minimum distribution age. While it certainly will be exciting to see what comes of these suggestions it is clear that change will be required to solve the existing market and retirement challenges. For CIOs, this means now is the time to prepare for the requirement of ever increasing data insights and to enable agility in the annuity application portfolio to support significant and rapid changes to products.
Add new comment