BOSTON -- Only about 50 percent of annuity ideas make it out of the idea generation phase, according to a survey co-sponsored by LIMRA.
Annuity ideas are at a premium these days as producers sit on a hot seat warmed by the Department of Labor and its fiduciary regulation. LIMRA surveyed producers in a study with Reinsurance Group of America.
Results were shared Friday at the 2016 Retirement Industry Conference.
Respondents said their companies initiated an average of 4.2 new product development efforts in a one-year time frame. Of those, variable annuities accounted for 43 percent of new products, while indexed annuities came in at 28 percent. Single premium income annuities (12 percent), fixed annuities (11 percent) and contingent deferred annuities (6 percent) trailed.
About 30 annuity companies responded to the survey, said Donna Megregian, vice president and actuary at RGA.
The median time from idea origination to product launch came in at 47 weeks for VAs, 40 weeks for indexed annuities, and 37 weeks for fixed annuities.
"The annuity (producers) in general said they were targeting the middle market, and that kind of surprised us," Megregian said.
The fiduciary rule placed VAs and fixed indexed annuities under the Best Interest Contract Exemption, which will require thorough disclosures and a contract. Analysts expect commissions to come down and say the pressure is on manufacturers to come up with products that satisfy everyone from agents to regulators to consumers.
When asked where their companies "need help," respondents listed staffing (45 percent) and technology (43) as the greatest needs to meet the challenges.
"IT continues to be a struggle for many people in terms of making that more efficient," Megregian said.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected].
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