We would love to hear from you. Click on the ‘Contact Us’ link to the right and choose your favorite way to reach-out!

wscdsdc

media/speaking contact

Jamie Johnson

business contact

Victoria Peterson

Contact Us

855.ask.wink

Close [x]
pattern

Industry News

Categories

  • Industry Articles (21,155)
  • Industry Conferences (2)
  • Industry Job Openings (35)
  • Moore on the Market (414)
  • Negative Media (144)
  • Positive Media (73)
  • Sheryl's Articles (800)
  • Wink's Articles (353)
  • Wink's Inside Story (274)
  • Wink's Press Releases (123)
  • Blog Archives

  • March 2024
  • February 2024
  • January 2024
  • December 2023
  • November 2023
  • October 2023
  • September 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • November 2009
  • October 2009
  • August 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • November 2008
  • September 2008
  • May 2008
  • February 2008
  • August 2006
  • New Players Enter Indexed Annuity Space

    March 10, 2012 by Maria Wood

    The return of the captive agent?

    By Maria Wood

    March 2, 2012 •

     

    When you’re anointed the latest hot product, others will naturally take notice and want to follow your lead. So it is with indexed annuities.

    According to Conning Research & Consulting, between 2005 and 2010, indexed annuities charted a 9.3 percent compound annual growth rate in the number of in-force contracts. That compares to 1.9 percent for variable annuities and 2 percent for traditional fixed annuities. Since the compound annual growth rate for the target population of likely annuity buyers grew by 2 percent during that same time period, indexed annuities grabbed the largest share of that potential sales pot.

    And that growth trajectory should continue. Scott Hawkins, (below right) vice president of insurance research and consulting for Conning in Hartford, Conn., recently authored a study entitled, “Indexed Annuities: New Growth Opportunities.” Last week, he detailed the opportunities and challenges indexed annuity providers face in today’s economy.

    In this article, he speaks about how new distribution channels and methods are changing the indexed annuity landscape.

    The return of the “captive agent?”

    Over the past several decades, the life insurance industry has shifted away from the captive, or home office, agent prototype toward independent distribution networks. In that way, carriers avoid the human resources costs, and instead pay for production, Hawkins says.

    So when Allianz announced its exclusive distribution channel for its fixed index annuity, Hawkins’s interest was piqued. In a sense, these are “virtually tied agents,” and represent something of a return to the captive agent model, he asserts

    It’s not unusual for a carrier to require a distributor or agent sell a specified amount of its products, Hawkins says. The Allianz model goes further, however, in that the distributor/agent must submit its materials to the carrier for suitability review.

    “There are examples of firms that have worked with distribution FMOs to set up a product, but not to that level of exclusivity. That was the new thing that made me want to write about it and say, hmmm, this may signal an emerging trend,” Hawkins says.

    Only time will tell if other firms will emulate Allianz’s strategy, Hawkins says. “If Allianz can prove successful at it, you would certainly expect other companies to think about it and walk through the implications for their own business.”

    Yet if others imitate the Allianz model, it could have implications for others who want to enter the field. “All else being equal, it creates certain barriers to entry for those looking to expand or enter this space if they can’t get distributor shelf space,” Hawkins says.

    The Conning report highlights other distributions challenges. First, the cadre of agents is dwindling and aging. In addition to exclusive distribution agreements like Allianz’s, some distributors are partnering with insurers to develop distributor-designed indexed annuities. “Both virtually tied agents and distributor-designed products create competitive barriers indexed annuity insurers need to overcome,” states the report.

    New players alter playing field

    Established indexed providers may find their exclusive perch threatened by new entrants, specifically variable annuity players. Recently, Hartford and Genworth moved into the indexed annuity field.

    VA providers bring several advantages to the market: They have established distribution networks and experience managing the hedging programs used for the living benefits and needed to generate the index-linked returns.

    “Those players could pose a challenge to the concentrated market share of the major index annuity players, because you have large insurers coming in who have established distribution networks and the investment management capabilities to address the challenges of the back office of managing an index annuity,” Hawkins says.

    Clearing the path for new entrants was the elimination of the threat of 151A, Hawkins notes, which has stabilized the regulatory environment around the product. “That goes to the heart of the whole distribution channel for the industry,” he says.

    Originally Posted at LifeHealthPro on March 2, 2012 by Maria Wood.

    Categories: Industry Articles
    currency