The annuity industry is swinging a double-edged
sword right now. Consumers are flocking to the
safety of annuities, but many carriers are struggling
to keep up with the demand.
General economic deterioration, growing credit losses
and the slumping equity markets have put carriers in a
bind. The annuity industry, which experienced its best year
ever in 2008, is in system shock right now. Aviva, the top
carrier for independent producers, is dropping and stopping
new annuity appointments and will cut production
because the market is growing too fast in 2009.
Has it been too much of a good thing? In 2008, fixed annuity sales ended up 60 percent
over 2007. Wow. But what's next?
Don't fret. 2009 may become the Year of the Crucible for the annuity industry. I am no
prophet, but we may experience a time where carrier and product selection is refined in
the fire of economic and regulatory pressure. Someone has said that fixed annuities may
be "a" savior for our economy. I am inclined to agree.
This issue is an important reference for anyone who sells annuities or not. As carriers
pull back on production due to the inability to remain profitable, meet their risk-based
capital requirements, or any other number of financial issues behind the curtain, we
need to be prepared. How do you do that?
Discover more in Carriers Cut Annuity Production Just as Demand Explodes. We've
researched and brought together the perspectives of different experts in the field with
the goal of keeping you aware and ready to stay competitive.
And competitiveness is the big question mark remaining. With a smaller product selection
coming down the pike, what will the impact be on your ability to compete? Was
last year just a bubble year for the industry? Will that bubble pop in 2009? Join us as we
delve deeper into this issue.
For life and health producers, this issue also offers a rich trove of ideas and concepts.
In Warning: Policy Loans Not Tax Free, author Willard Brumbaugh has responded to an
article from our February issue, entitled The Obama Era. Brumbaugh warns the reader
that there is a difference between the terms "untaxed" and "tax-free" and that using such
a term when describing policy loans could stir up trouble in your business. In such an
example, we want to remind the reader that you are always invited to respond to our
content as we look to build a smarter, more prepared reader community.
We also invite you to experience the world of advanced estate planning in Kenneth
Godfrey's insightful and case-filled article, Think Before You Calculate. And for health
producers, there is much to learn in Sometimes COBRA Is Not Worth the Bite. There's
something for everyone in this issue.
Enjoy your time with InsuranceNewsNet Magazine this month.