For the future, no matter which way the stock market goes, the outlook for annuities appears promising. “This bull market has had a long run, and greater market volatility is creeping in,” observes Troy Dryer, vice president of business development at Investment Provider Xchange (IPX), a Centennial, Colo.-based financial services concern for businesses. That could be good for annuities. “The guarantees and insurance options are starting to become more attractive in a market that is starting to look uncertain,” he says.
What’s more, he adds, a growing population of retirees is looking for distribution that protects principal. “FIAs, if structured correctly, could be a good payout option for individuals who need a dependable stream of income,” says Dryer.
Whatever the reasons, Giesing at the LIMRA Secure Retirement Institute projects that sales will continue to be steady at least in the medium term. “Early indications are looking good for both fixed and variable business,” he says. “We expect a stronger second half [of the year], with slight growth in VAs and stronger growth in fixed annuities.”
And if sales remain strong, you can bet that insurance companies will keep introducing new and innovative annuity contracts to attract and keep that growing customer base.