Did You Know?
- That, as of the first quarter 2011, the combined net assets of U.S. variable annuities were valued at nearly $1.6 trillion, an 11% increase from first quarter 2010 and the highest level ever recorded?
- In 2010 fixed annuity assets were valued at $659 billion a 6% increase from 2009?
- That in 2010, the total average expense difference between variable annuities and mutual funds was 1.01%?
- In 2011, the contribution limits range from $5,000-$6,000 for an IRA, $16,500-$22,000 for a 401(k) and $200,000 plus for a non-qualified annuity?
- That the average number of funds per variable annuity contract was 50 in 2010, of which 47% of assets were invested in equities, 11% in bonds, and 20% in fixed-rate accounts?
- That the guaranteed lifetime withdrawal benefit was offered on 79% of variable annuities in 2011 and was elected by 65% of contract holders?
- Boomers who own annuities have a higher confidence in retirement expectations, with 92% believing they are doing a good job in preparing for retirement?
Tools to Assist in Your Investment Decisions
Investors Increasingly Consider Annuities to Be a Vital Part of a Retirement Strategy
IRI 2012 Annual Meeting Kicks Off with Unveiling of New Research on Annuity Perceptions and Usage Trends
WASHINGTON, D.C. - The Insured Retirement Institute (IRI) and Cogent Research today announced new research results showing that during the past year, annuities have become more widely accepted as a vital part of a retirement strategy. The new survey of investors and financial advisors released at the IRI 2012 Annual Meeting found that among investors, 73 percent of annuity owners and 17 percent of non-owners agreed that annuities are an important part of one's retirement strategy, compared to 55 percent and eight percent, respectively, in 2011.
"While we doubled the awareness of the annuity value proposition with non-annuity owners, there remains room to improve," IRI President and CEO Cathy Weatherford said. "Despite the growing awareness and acceptance of annuity products, among non-owners only five percent identified themselves as being very or extremely knowledgeable about our products. This provides a tangible opportunity for the industry to grow its market share in a meaningful way."
The new report also offered insights into the growing adoption of annuities. While guaranteed income, advisor recommendation, and tax deferral continue to top the list of reasons to purchase annuities, inflation is becoming an increasing concern for investors. Only one percent of investors cited inflation protection as a reason to purchase an annuity in 2011, but that increased to six percent in 2012. Furthermore, among annuity owners, 63 percent said market volatility makes them more likely to consider purchasing an annuity.
"The current economic and market volatility has resulted in more conservative investors who are increasingly searching for investment vehicles, like annuities, that can provide market growth, guaranteed income benefits, and some level of principal protection," Cogent Research Managing Director Anthony Ferreira said. "The results indicate that while more investors and advisors are open to using annuities in a balanced portfolio, the industry must work harder to address lingering concerns regarding investor perceptions, firm stability, and overall commitment to providing future benefits."
The survey also found that more than 70 percent of advisors using annuities reported that their clients have requested to purchase an annuity, and 84 percent of annuity producers are having more conversation on retirement income than they were five years ago.
A snapshot of this new report, The Evolution of the Annuity Industry, is available HERE.
About the Insured Retirement Institute: The Insured Retirement Institute (IRI) is a not-for-profit organization that for twenty years has been a mainstay of service, commitment and collaboration within the insured retirement industry. Today, IRI is considered to be the authoritative source of all things pertaining to annuities, insured retirement strategies and retirement planning. IRI proudly leads a national consumer education coalition of nearly twenty organizations and is the only association that represents the entire supply chain of insured retirement strategies: Our members are the major insurers, asset managers, broker dealers, and more than 150,000 financial professionals. IRI exists to vigorously promote consumer confidence in the value and viability of insured retirement strategies, bringing together the interests of the industry, financial advisors and consumers under one umbrella. IRI's mission is to: encourage industry adherence to highest ethical principles; promote better understanding of the insured retirement value proposition; develop and promote best practice standards to improve value delivery; and advocate before public policy makers on critical issues affecting insured retirement strategies and the consumers that rely on their guarantees. Visit www.IRIonline.org today to experience the vast resources of the Insured Retirement Institute for yourself.
About Cogent Research: Cogent Research helps clients gain clarity, obtain perspective, and formulate direction on critical business issues. Founded in 1996, Cogent Research provides custom research, syndicated research products, and evidence-based consulting to leading organizations in the financial services, life sciences, and consumer goods industries. Through quality research, advanced analytics, and deep industry knowledge, Cogent Research delivers data-driven solutions and strategies that enable clients to better understand customers, define products, and shape market opportunities in order to increase revenues and grow the value of their products and brands.
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