Table of Contents
- Introduction and Abbreviations
- Introduction
- Abbreviations and terms
- Abbreviations
- Terms
- Executive Summary
- Top issues and developments in the industry
- The retirement landscape
- How annuity providers are responding
- The annuity consumer
- Market Drivers
- Marketplace perception of annuities
- Psychological resistance to annuities
- Annuities difficult to explain--even for advisors
- Retirement plan sponsor concerns about offering annuities
- Retirement plan landscape
- Increasing prevalence of defined contribution plans
- Figure 1: Defined benefit and defined contribution plans, 1990-2005
- Low savings rates among Americans
- Figure 2: Reported total savings and investments by age (excluding
primary residence), 2005
- Figure 3: Participant decisions when leaving employer, 2004
- Figure 4: Employees who do not allocate a percentage of monthly income
to retirement savings, 2005
- Postponement in addressing retirement savings needs
- Lack of knowledge about how much retirement income will be needed
- Slow sales of annuities outside of qualified plans
- Figure 5: Total annuity assets in qualified and non-qualified plans,
1995-2004
- Expanded rollover market
- Figure 6: IRA market share by holder dollars, year end 2000-04
- Rising popularity of lifecycle funds
- Product innovations
- Rising popularity of "living benefits"
- Equity indexed annuities and regulatory issues for sales
- Other new product developments
- Appearance of secondary markets for annuities
- Legislative issues
- Market Size and Segmentation
- Segmentation by annuity type
- Annuity sales--fixed annuity vs. variable
- Figure 7: Individual annuity considerations (estimates) of the total
annuity sales market, 2001-05
- Figure 8: Fixed and variable annuity sales, 1995-2004
- Annuity sales--deferred vs. immediate
- Figure 9: Sales of deferred and immediate annuities, 1996-2004
- Total variable annuity assets
- Figure 10: Variable annuity total net assets, 2004-05 Figure 11: Total
variable annuity premium activity, 2004-05
- Figure 12: Net assets in variable annuities vs. mutual funds, 1995-2004
- Figure 13: Variable annuity net assets by investment objective, year end
2004
- Fixed annuity sales
- Equity indexed annuity sales
- Figure 14: Sales of equity indexed annuities, 1997-2005
- Annuity sales--qualified annuity vs. nonqualified annuity
- Segmentation by distribution channel
- Figure 15: Sales of individual annuities by distribution channel, 2001
and 2005
- Figure 16: Distribution channel for fixed annuities, top company in
channel, and top product, 2006
- Drivers for annuity sales channel preferences
- Bank sales of annuities increasing
- Figure 17: Total annuity sales by banks, 1990-2003
- Figure 18: Bank share of fixed annuity premium dollars, 1996-2005
- Figure 19: Bank share of variable annuity premiums, 1996-2005
- Competitive Landscape
- Major sellers of annuities
- Figure 20: Top ten writers of variable annuities by new sales, 2005
- Figure 21: Top ten writers of variable annuities sold through banks,
2004 and 2005
- Figure 22: Top ten writers of fixed annuities sold through banks, 2004
and 2005
- Figure 23: Top ten producers of equity index annuities, including total
sales for all annuity products, 2004
- New product developments
- Qualified plans and annuities
- Simplifying annuity decisions
- Combining product features of annuities
- Adding guarantees and flexibility to income options
- Lowering fees
- Leaving annuity assets to beneficiaries
- Equity indexed annuities
- Assistance for financial advisors and retirement plan sponsors
- Marketplace for direct sales to consumers
- Advertising and Promotion
- Allstate
- Figure 24: Allstate Life Insurance/Lincoln Benefit Life advertisement,
2005
- AXA
- Figure 25: AXA Equitable annuity advertisement, May 2006
- UJA Federation of New York
- Figure 26: UJA Charitable retirement annuity advertisement, May 2006
- United Liberty Financial
- Figure 27: United Liberty Financial annuity advertisement, June 2005
- Fidelity
- Figure 28: Fidelity income annuity advertisement, March 2006
- ING
- Figure 29: ING SmartDesign fixed annuity print advertisement, November
2005
- New York Life
- Figure 30: New York Life LifeStages Income Annuity, January 2006
- Prudential Financial
- Figure 31: Prudential annuity print advertisement, December 2005
- The Consumer
- Summary of consumer survey findings
- Understanding of and ownership of annuities
- Figure 32: Percentage of all adults who own annuity products, by gender,
January-September 2005
- Figure 33: Current market value of annuities owned, by gender,
January-September 2005
- Figure 34: Familiarity with annuities as an investment, by gender, June
2006
- Figure 35: Familiarity with annuities as an investment, by age, June 2006
- Figure 36: Percentage of the overall population that own annuities, by
age, January-September 2005
- Figure 37: Familiarity with annuities as an investment, by income and
education, June 2006
- Figure 38: Percentage of the overall population that own annuities, by
income, January-September 2005
- Figure 39: Familiarity with annuities as an investment, by
race/ethnicity and region, June 2006
- Perception of annuity features
- Figure 40: What respondents like best about annuities, by gender, June
2006
- Figure 41: What respondents like best about annuities, by age, June 2006
- Figure 42: What respondents like best about annuities, by income, June
2006
- Figure 43: What respondents like least about the annuities, by gender,
June 2006
- Figure 44: What respondents like least about the annuities, by income,
June 2006
- Figure 45: What respondents like least about the annuities, by age, June
2006
- What annuity owners think
- Figure 46: Why annuity owners purchase the annuity, by gender, June 2006
- Figure 47: Why annuity owners purchase the annuity, by age and income,
June 2006
- Figure 48: Appealing features of annuities to annuity owners, by gender,
June 2006
- Figure 49: Appealing features of annuities to annuity owners, by age and
income, June 2006
- The Future
- Future trends
- Prevalence of living benefit features guaranteeing withdrawals
- Continued flexibility for annuity income options
- Emphasis on "hybrid" approach--combining deferred and immediate annuity
features
- Addressing needs of lifecycle fund investors
- Annuity selection services for mass market
- More advisor sales of annuities
- Expanded education programs
- Post-retirement advice programs for retirement plans
- Figure 50: Employee interest in employer providing access to financial
planners at work to help make decisions about all financial needs, 2005
- Tax policy encouraging annuitization
- Education and sales literature provided in various languages
- Targeting women
- Market forecast
- Projection of annuity sales
- Figure 51: Forecast of total U.S. sales of annuities, at current and
constant prices, 2005-09
- Variable annuities
- Figure 52: Forecast of U.S. sales of variable annuities, at current and
constant prices, 2005-09
- Fixed annuities
- Figure 53: Forecast of U.S. sales of fixed annuities, at current and
constant prices, 2005-09
- Forecast factors
- Appendix: Trade Associations
- Appendix: Advertising and Promotion
- Figure 54: Principal Financial Group television advertisement, 2006
- Figure 55: Prudential television advertisement, 2006
- Figure 56: Prudential television advertisement, 2006
- Figure 57: The Hartford television advertisement, 2006
- Figure 58: The Hartford television advertisement, 2006
- Figure 59: Wachovia television advertisement, 2006
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