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Life Health > Annuities

What Product Group Will Come Next?

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The following is a reformatted version of an article that was published in National Underwriter Life & Health Magazine Nov. 24, 1997. 

The head count for the most recent annual meeting of National Association for Variable Annuities, Reston, Va., is a head-scratcher for devotees of all kinds of insurance products, not just annuities.

The grand total came to 553-quite a sizable number given that NAVA is just six years old and has only one product line (variable annuities) as its focal point. It’s even more notable, considering that, when NAVA formed back in 1991, several wags predicted it would crumble-because its one-product scope was seen as too narrow and its universe of potential backers too limited.

Granted, NAVA has broadened its reach in recent years by offering some variable life programming and by adding fixed annuities to its purview. Even so, most NAVA activities still spin around VAs…and NAVA still continues to grow. So, you gotta wonder: “Why?” That’s the head-scratcher.

Certainly, part of the answer has to do with NAVA’s own skill at slaying the dragons of doubt. But I think a little-discussed industry trend is at the core of it: That is the growing tendency of product pros to organize and/or attend meetings centered around topical, cutting edge products, whether they be annuities, long-term care, life, disability, indexed, or whatever.

These gatherings are being handled both on a formal and an ad hoc basis. NAVA is an example of the formal type, but plenty of other product-focused organizations exist. To name only a few: National Tax Sheltered Annuity Association, Reston, Va.; National Structured Settlement Trade Association, Washington, D.C.; Profit Sharing/401(k) Council of America, Chicago; American Association of Health Plans, Washington, D.C.; Stable Value Association, Washington, D.C.; and the brand new National Association for Indexed Products, Reston, Va.

Those offering ad hoc meetings (i.e., targeted product confabs) include the growing number of third-party “seminar companies” that typically host sessions for a profit. They also include insurance entities (like insurers, reinsurers, brokerages, and wholesalers) which often host meetings to hype particular products, but which are increasingly going generic, even to the point of offering continuing education credits. Bank and attorney groups, universities, and consulting firms are also getting into the act.

What’s noteworthy is that all of these groups, and more, have been engaging in an ever-widening array of product programming, even though the mainline trade and education organizations have sponsored product events-and strong ones-at the same time. Just what is going on?

From what I hear, the appetite for information, idea exchange, and united effort regarding today’s complex new products is so high that the mainline associations just can’t meet all of the demand, given their vast constituencies and budgetary restraints.

And it’s not just the complexity of products that’s driving this. The regulatory, legal and consumer issues are factors, too. Some of the new designs are so cutting edge, say products experts, that they present numerous regulatory, legal and educational challenges-challenges that need the industrywide thinking best found at targeted product meetings attended by multiple industry interests.

Yet another driver is consumer need for information. Some of the new products are so novel, and they are developing so rapidly, that consumers feel left in the dark, it is said. In certain product lines, the confusion level is seen as so pronounced that some observers fear it will derail market penetration. Therefore, product people want to address the problem quickly, and directly, with broad-based consumer education initiatives born of targeted product groups.

No doubt some firms send representatives to these functions just because the competition is there. But judging by the networking and deal-making that goes on, to say nothing of resource building, idea incubating, research-sharing (even research-commissioning), and education planning, I’d say they get a lot more than competitive intelligence. They get a place in the new product frontier.

I’ve been wondering: Once all these hot new products mature, will the programming and organizations they brought forth fold into the mainline trade groups or perhaps grow or merge into a larger product association? Or will they simply evaporate?

And what will come next…a National Association for Long-Term Care Insurance Products? Long-Term Level Term Products? Critical Illness Products? Medical Savings Account Products? Hmm…

Reproduced from National Underwriter Life & Health/Financial Services Edition, November 24, 1997. Copyright (C) 1997 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.


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