Fee-Based Annuities Bright Spot In Disappointing 2017
December 27, 2017 by Cyril Tuohy
If 2017 is shaping up to be a letdown for annuity sales, it wasn’t for lack of trying as insurers launched new products and tinkered with product features to burnish annuities for distributors battling a tough regulatory environment.
Several trends dominated the annuity industry this year as the products struggled mightily against the Department of Labor (DOL) fiduciary rule that, in the end, only managed partial implementation yet extended the state of quasi-limbo.
Fee-based annuities fanned further into the market while buffered variable annuity sales took off.
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Indexed Annuities: Volatility Control
With the availability of volatility control indexes on indexed annuities, you can offer the product without the cap and talk about the unlimited potential for gain,” said Sheryl J. Moore, president and CEO of Moore Market Intelligence and Wink Inc.
Surrenders, Commissions, Banks and B/Ds
Sales of indexed annuities with surrender periods of less than 10 years gained market share, compared to indexed annuities with surrender periods of more than 10 years, according to Wink data.
Commissions on indexed annuities also fell this year, continuing a long-term trend.
The average commission on an indexed annuity in the third quarter was 4.95 percent, the lowest ever, Moore said.