The “Great Recession,” followed by a sustained low-interest rate environment, are just a couple of factors that have contributed to a fairly tumultuous period in the life insurance industry over the past half-decade. One bright spot within the industry, however, has been the continued robust growth of fixed indexed annuity (FIA) sales.
First introduced in the mid-1990s, fixed indexed annuities are a relatively new product line by industry standards. However, 2014 sales reached nearly $47 billion, representing the sixth consecutive record year for sales, according to Wink, Inc., an annuities and life insurance consulting firm. And sales don’t show signs of slowing down either. First-quarter sales this year topped $11 billion, greater than any other first quarter in the history of the product line, according to “Wink’s Sales & Market Report.”
While sales figures have been nothing short of impressive, intuitively, the product’s widespread popularity makes a lot of sense. For investors worried about market volatility, fixed indexed annuities offer a modest guaranteed minimum return, along with the potential to earn additional interest when the market increases. With a seemingly infinite variety of features and index options, financial sales professionals are not suffering from a lack of choice when making product recommendations to their clients.
To better understand the experiences and challenges of advisors when selling this timely product, National Underwriter Life & Health conducted a comprehensive survey of financial sales professionals actively selling annuities. Athene sponsored the research study. The purpose of the project was to understand the expectations and needs of advisors, the types of clients they sell FIAs to, their optimism about their own product sales, areas where they feel they would benefit from additional training, and much more. The results of the study have been illuminating.