Product developers of variable annuities rate “clients served” and “advisor and/or broker-dealer input” as the most important factors in designing VAs as well as life insurance, according to a new report.

The report from Cerulli Associates, Boston, also notes that product developers surveyed believe it is critical they know the context in which these products will be used.

Advisors who serve different markets need to position them alongside other products, Cerulli notes.

“Gaining a stronger understanding of advisors’ motivations will require insurers to analyze the characteristics of distribution channels and the segments that reside in them, such as practice types, compensation structure, and client net worth,” says Lisa Plotnick, associate director of Cerulli and lead author of “Cerulli Quantitative Update: Annuities and Insurance 2008. “For example, fee-based advisors give less weight to living benefits than commission-based advisors.”

VA development strategies must include the eventual positioning of the product, she adds.