The Life and Annuity Guarantee Frog Is Boiling
September 30, 2020 by Harry N. Stout
We are all familiar with the fable. It’s about a frog being slowly boiled alive.
For financial professionals, the way I see it is that, if the life and annuity industry were suddenly put into a pot of boiling water (diminished product guarantees), it would seek to offer consumers other product solutions or create new product offerings very quickly.
On the other hand, if the industry is put in tepid water (bearable but consistent product downgrades and changes), which is then brought to a boil slowly, it will not perceive the danger. Customers needing these guarantees to protect their financial futures will be cooked. (In other words: They will not be able to purchase the guarantees they need). The story is told as a grim metaphor for the industry’s reaction to change or its awareness of survival threats that arise gradually rather than suddenly.