At first glance, the annuity industry may not appear to have much in common with Major League Baseball (MLB). Yet with Q1 well under way, and pitchers and catchers slated to report to spring training on February 18, observers in both fields are offering their prognostications for what the coming year will bring. From my vantage point, the two are not entirely unrelated.
Like every baseball season these days, the large market teams like the Red Sox, Yankees, and Dodgers are spending money this offseason to find the right combination of free agents to propel themselves to the World Series. The annuity market for carriers in 2016 will be no different as the industry is likely to continue seeing capital spent on development across the spectrum, from new products and riders in the traditional VA space to products in growing markets, such as the indexed space. Yet with potentially major changes on the horizon for baseball and the annuity industry, the question is: will this be money well spent?
In an effort to boost teams’ offensive production and, in turn, fan attendance, MLB’s American League adopted the designated hitter (DH) rule in 1973. Pitchers, who are typically the worst hitters on the team, were no longer required to bat, drastically changing the contours of the game. Yet while colleges, high schools, and little leagues across the country quickly followed suit, the National League stood fast. Now, however, there are rumors that the DH could be coming to the National League in 2017, creating uncertainty among team executives who must build for the future without knowing exactly what it will look like.