Indexed Annuities: Time to Enter?
Conning: Indexed Annuities Changing the Annuity Competitive Landscape
- Conning reviews development of and forecasts the indexed annuity market
- Conning analyzes indexed annuity products and profitability
HARTFORD, CT – March 4, 2021 – Since the financial crisis of 2008-2009, indexed annuities have benefited from a market movement away from variable annuities and fixed annuities. The number of insurers offering indexed annuities has grown, as has product complexity. In addition to increased complexity, a new type of indexed annuity, the RILA (registered index-linked annuity) has emerged and continues to gain market share.
However, many insurers remain on the indexed annuity sideline. Is now the time for these insurers to enter, and if so, which indexed annuity path should they follow? What should those considering entering this product line understand about the competitive landscape and product design in making that decision?
“When it comes to premium, variable annuities have dominated the individual annuity market for decades,” said Scott Hawkins, a Director, Insurance Research at Conning. “However, that is no longer the case. Equity market volatility has reduced the consumer appeal of VAs, while low interest rates have made traditional fixed annuities less attractive. Indexed annuities have been filling that gap.”
The Conning study, “Indexed Annuities: Time to Enter?” analyzes the development of indexed annuities. It reviews the current indexed annuity market, its drivers, players, and products. It examines the financial performance for the indexed annuity line and presents our forecast through 2022. Further, the study analyzes the development and features of the hottest new annuity product, the RILA.
“The individual annuity product line is shifting,” said Steve Webersen, Head of Insurance Research at Conning. “Consumers want some degree of protection while earning a higher than guaranteed minimum return. This creates a challenge for those life insurers that only have traditional fixed annuities in their product lineup.”
“Indexed Annuities: Time to Enter?” is available for purchase from Conning by calling (888) 707-1177 or by visiting https://www.conning.com/insurance-research.
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Conning (www.conning.com) is a leading investment management firm with a long history of serving the insurance industry. Conning supports institutional investors, including pension plans, with investment solutions and asset management offerings, risk modeling software, and industry research. Founded in 1912, Conning has investment centers in Asia, Europe and North America.
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