Buffered Annuities Are Hot. Whether They’ll Stay That Way Is Disputed.
January 31, 2022 by Cyril Tuohy
… No way, says Sheryl Moore, CEO of research firm Wink. She sees sales of $86 billion by 2025 for 22% yearly growth.
Article excerpt: But Moore, whose firm publishes Wink’s Sales & Market Report, thinks $50 billion by 2026 is far too low.
“This market has grown much faster than that since the products were first created,” she noted. Equitable was the first to develop the products in 2010.
The products offer more upside potential than fixed-indexed annuities, which aren’t as attractive now with interest rates so low. At the same time, they limit losses in slumping markets, which traditional variable annuities don’t do, she said.
Also the reserving requirements for buffered annuities are lower than for fixed annuity products, she said.
“The fantastic growth in these products isn’t likely to wane soon and both indexed and variable annuity sales are likely to lose market share to these relative newcomers,” Moore said.