2013 Retail Annuity Inflows and Today’s Best Annuity Marketing Potential

Share Article

Information Asset Partners' analysis of 2013 DTCC inflow data links retail annuity market characteristics to production in key states.

“This is the first published analysis of DTCC Analytic Reporting for Annuities’ inflow data* using consumer financial behavior data,” said Bill Poll at Information Asset Partners (IAP). “Our retail annuity metric, driven by recent buying behavior, provided an objective market benchmark for DTCC’s $94 billion in 2013 ZIP code-level inflows across 117 carriers, 138 distributors, and 3,467 products.”

The metric determined that 70% of the current retail annuity market’s households live in 22% of ZIP codes. Each of these ZIP codes was included in the 22% because it represents annuity buying potential that is 3 or more times higher than its state benchmark. Given this concentration, IAP focused its analysis on the 2013’s inflows originating from the 22% within 12 large states. The key finding:

  • Where retail annuity market potential is geographically concentrated - Illinois, New York, and Virginia - the industry was most efficient at capturing market potential
  • Where market potential is geographically dispersed – California, New Jersey, and Florida - the industry was less efficient

“’Efficient’ means capturing high annuity potential at comparably high inflow rates: >3X state benchmark for both annuity buying potential AND 2013 inflows,” added Poll. “Developing this analysis from the ZIP code-level up provides new market intelligence that will enable distributors to understand the localized dynamics that advisors are facing and develop new approaches that build market share. Marketers are likely to encounter greater growth potential and less competition in states and territories where the industry is less ‘efficient:’ there’s more unmet market potential.”

The twelve states represent over half of today’s annuity market. Within their respective best annuity markets, Illinois’ efficiency was 96% and Florida was 42%.” Representing over 10% the annuity market, California came in at 66%. The US overall, 83%. California, New Jersey, and Florida’s retail annuity markets are “flatter.” In these three states more ZIP code-level markets with somewhat lower levels of potential add up to one-fifth of the US total. From a distribution perspective, that means more relationships to develop and support, each facing different retail annuity buyer dynamics.

The report, “Locating the Thin Edge of the Wedge in Annuity Distribution,” is available on IAP’s Web site (http://www.iapartners.com/uploads/1/3/3/8/13381670/locating_the_thin_edge_of_the_wedge_in_annuity_distribution_-an_annuity_market_assessment_analysis.pdf). IAP’s recently introduced solution for annuity distributors and producers – Annuity Market Assessment – was used to develop this analysis. Further information about the quarterly market intelligence is available on IAP’s web site (http://www.iapartners.com/empirics-annuity-market-assessment.html).

The linkage between retail market characteristics and their inflows has implications for annuity marketers and producers. Distribution can segment and monitor each financial advisor relationship based on the advisor’s underlying market conditions and how they are changing. Annuity Market Assessment’s objective market benchmarks and quarterly updates provide the means to target advisors and their markets to increase production. For producers, practice level market intelligence enables improved marketing ROI, particularly for direct marketing, and the evaluation of new markets.

Annuity Market Assessment’s deliverables can be tailored to meet the needs of individual advisors seeking to expand or improve their annuity production, and carriers, broker dealers, and insurance marketing organizations with complex retail and institutional marketing programs seeking to improve ROI and performance.

About Information Asset Partners

Founded in 2003, IAP specializes in the development and application of analytic solutions that focus on marketing performance and customer value for clients in wealth management, asset management, insurance, and banking: Measuring where institutional meets retail. For these clients, IAP’s Empirics investable asset, product, and retail financial behavior metrics provide new, integrated, forward-looking ways to assess their markets and manage marketing performance.

Information Asset Partners is located in Metuchen, NJ.

Contact IAP at 732.662.1859 or visit http://www.iapartners.com for further information.

*Source: Analytic Reporting for Annuities from the Insurance & Retirement Services of National Securities Clearing Corporation, a DTCC Subsidiary. Visit http://www.dtcc.com/analytics for more information or contact your I&RS Relationship Manager.

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Bill Poll
Visit website