Amidst growing financial pressure, insurance companies are looking to non-traditional sources of growth, said Cerulli Associates. According to the global analytics firm’s report, “Annuities and Insurance 2013: Balancing Shrinking Supply and Increasing Demand for Guarantees,” many insurers scramble to diversify their business mix, and opportunities in the pension plan (i.e., defined benefit plans) marketplace are being revealed. “We’ve seen increasing product development and reinvention among insurers in other business lines,” Donnie Ethier, senior analyst at Cerulli said.
While progress in the traditional variable annuity (VA) market has been marginal, there has been inspiring product development and reinvention among insurers in other business lines, including deferred income annuities (DIAs) and structured VAs, according to the report. Controversially, indexed universal life (IUL) and fixed-indexed annuity (FIA) activity has intensified. Cerulli said it very much supports the development of other potential solutions in the making, including contingent deferred annuities (CDAs), fee-based VAs and simplified VAs, although acceptance and overall sales are unsubstantiated.
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