Study Shows Annuity Industry Poised for Growth
November 16, 2011 by Anne Fallon
CAMBRIDGE, Mass., Nov 15, 2011 (BUSINESS WIRE) — Two major changes are
taking place in the annuity industry today. According to a new report released
by Cogent Research and the Insured Retirement Institute (IRI), conversations
with advisors have become more emotional and are heavily geared toward securing
retirement income as opposed to accumulating assets. In fact, nearly two-thirds
(65%) of advisors currently selling annuities indicate that guaranteed income
options are expected to increase in importance over the next five years — more
so than any other factor. This and other insights can be found in a new report,
The Evolution of the Annuity Industry, which outlines the opportunities and
challenges with annuities through the eyes of financial advisors, investors,
broker/dealer gatekeepers and insurance carriers.
Eight in 10 advisors who sell annuities report that they are having more
client discussions about retirement income planning than they did five years
ago. “Increased market volatility, shrinking retirement savings, and the
disappearance of pensions have investors taking a long hard look at the value of
annuities in their portfolios,” said Marie Rice, Custom Research Practice
Director at Cogent Research. To further support this paradigm shift towards the
need for retirement income and the emotional security that comes with it, over
one-third of investors (34%) report the main reason for purchasing an annuity is
guaranteed income; and two-thirds (68%) of advisors report that they have
received at least one client request for an annuity in the last 12 months.
Overall, the annuity industry has seen significant growth over the past
couple of years. Assets in both variable and fixed annuities has reached a
record high of nearly $2.2 trillion in 2010, which is a 10% increase from the
previous year. “Opportunities abound for the financial services industry to not
only meet the growing investor demand for insured retirement strategies, but
also to develop business practices that support the continued acceptance and use
of these products,” said IRI President and CEO Cathy Weatherford. “Our research
has found that the most important retirement income goal, for all investors —
annuity owners and non-owners alike — is to ensure they do not run out of
money. With the market being ripe for insured retirement strategies, the
industry is in an extraordinary position to exponentially grow.”
About Cogent Research
Cogent Research helps clients gain clarity, obtain perspective, and formulate
direction on critical business issues. Founded in 1996, Cogent Research provides
custom research, syndicated research products, and evidence-based consulting to
leading organizations in the financial services, life sciences, and consumer
goods industries. Through quality research, advanced analytics, and deep
industry knowledge, Cogent Research delivers data-driven solutions and
strategies that enable clients to better understand customers, define products,
and shape market opportunities in order to increase revenues and grow the value
of their products and brands.
About the Insured Retirement Institute
The Insured Retirement Institute (IRI) is a not-for-profit organization that
for twenty years has been a mainstay of service, commitment and collaboration
within the insured retirement industry. Today, IRI is considered to be the
authoritative source of all things pertaining to annuities, insured retirement
strategies and retirement planning. IRI proudly leads a national consumer
education coalition of nearly twenty organizations and is the only association
that represents the entire supply chain of insured retirement strategies: our
members are the major insurers, asset managers, broker dealers and more than
75,000 financial professionals. IRI exists to vigorously promote consumer
confidence in the value and viability of insured retirement strategies, bringing
together the interests of the industry, financial advisors and consumers under
one umbrella. IRI’s mission is to: encourage industry adherence to highest
ethical principles; promote better understanding of the insured retirement value
proposition; develop and promote best practice standards to improve value
delivery; and to advocate before public policy makers on critical issues
affecting insured retirement strategies and the consumers that rely on their
guarantees. Visit www.IRIonline.org today to experience the vast resources of
the Insured Retirement Institute for yourself.
SOURCE: Cogent Research
Cogent Research Media Contact:
Cogent Research
Anne Fallon, 617-715-7611
afallon@cogentresearch.com
or
IRI Media Contact:
Danielle Holland, 202-469-3000
DHolland@irionline.org
