6 in 10 Consumers Ill-Educated About Annuities: IRI
January 18, 2011 by Warren Hersch
More than one-third of individuals polled in a new survey are unfamiliar with annuities, and almost as many have no opinion about the product.
The Insured Retirement Institute, Washington, published this finding in a summary of results from a new study it conducted in partnership with Cerulli Associates Inc., Boston. The survey identifies several key areas for growth within the annuity industry.
Among the report’s findings:
—The greatest challenge in marketing variable annuities is neither countering unfavorable press coverage (5%) nor negative perceptions of insurance company solvency issues (5%) but rather attracting (28%) and educating (25%) new advisors.
—The most effective methods for insurers to use to gain interest of advisors new to annuity business is to demonstrate how annuities can supplement portfolios (75%) and to provide training tools to show the value of annuities (75%).
—50% of firms require no paper to be completed when selling an annuity, while nearly 40% do not conduct any business electronically.
—More than 70% of insurance companies are aware of IRI’s straight-through processing standards.
IRI says that on average 7,000 people turn 65 each day this year. By the beginning of 2012, more than 41 million Americans will be age 65.
“The Baby Boomer tsunami has arrived, pushing the consumer need for retirement income to historic levels,” says IRI President and CEO Cathy Weatherford. “By increasing the awareness of the overall value proposition annuities can offer, the industry will see an even greater acceptance of insured retirement strategies from advisors and consumers alike in the coming year.”