How many annuity buyers are there in your city this year?

Historical, aggregated data has generated big numbers on the billions in annuity sales nationwide as well as sales by carrier and product. It’s relatively simple to determine the number of prospects who should be in the market for annuities given their age and level of wealth. To determine the number of annuity buyers in a given market this year, however, requires predictive analytics.

We asked Information Asset Partners (IAP), a firm specializing in predictive analytic data for the insurance and investment industries, to provide a look at the 2016 annuity market for cities, both the biggest and the fastest growing. IAP uses recent annuity buying data for variable annuities, fixed index annuities and fixed annuities across all manufacturers and distributors to develop bottom-up predictive analytics that enable marketers to assess market potential and growth, and target prospects online and offline.

The good news for annuity providers: IAP’s model is projecting just more than 3 percent growth in the number of households likely to buy annuities — 2.8 million households representing more than 4 million individuals. Even better, IAP’s new metric based on household investment objectives projects more than five times that number — 14.7 million households — are seeking guaranteed income.

“With the DOL ruling’s impacts we thought it vital to develop a series of off-the-shelf metrics that enable insurance marketers to profitably grow their business through distribution, lead gen and DTC by measuring and targeting their market potential along with analytics that add further insight and precision,” said Bill Poll of IAP.

IAP’s ranking incorporates several data points including:

IAP description of annuity market data

Likely annuity buyers are distributed over many cities and towns in each market. For example, Florida ranks third among states in annuity market potential, but because its most likely annuity buyers are distributed over more cities and towns, none of them make the top 10 largest markets. Jacksonville, Fla., ranks 17th.

Continue reading to see annuity market potential rankings and key dynamics for the 10 largest annuity markets for 2016.

 Austin Skyline, photo Wikipedia

Austin had the highest digital engagement of all the Texas cities in the top 10. (Photo: Wikipedia)

10. Austin, Texas

2014-2015 Annuity Market Rank: 10

2012-2013 Annuity Market Rank: 10

Guaranteed Income Goal Households Rank: 10

Digital Investment/Retirement Buying Index: 140

Digital Insurance Buying Index: 180

High Annuity Potential ZIP code: 78759

San Antonio, Texas, Wikipedia

San Antonio, Texas, had high growth and the lowest digital engagement of the Texas cities in the top 10. (Photo: Wikipedia)

9. San Antonio, Texas 

2014-2015 Annuity Market Rank: 9

2012-2013 Annuity Market Rank: 12

Guaranteed Income Goal Households Rank: 7

Digital Investment/Retirement Buying Index: 80

Digital Insurance Buying Index: 83

High Annuity Potential ZIP code: 78230

Phoenix

Even with double-digit growth, Phoenix slipped in the ranking.

8. Phoenix

2014-2015 Annuity Market Rank: 8

2012-2013 Annuity Market Rank: 7

Guaranteed Income Goal Households Rank: 6

Digital Investment/Retirement Buying Index: 95

Digital Insurance Buying Index: 116

High Annuity Potential ZIP code: 85022

 Independence Hall, Philadelphia

Philadelphia had the lowest digital engagement of the top 10 cities.

7. Philadelphia

2014-2015 Annuity Market Rank: 7

2012-2013 Annuity Market Rank: 6

Guaranteed Income Goal Households Rank: 5

Digital Investment/Retirement Buying Index: 62

Digital Insurance Buying Index: 84

High Annuity Potential ZIP code: 19147

 San Diego

San Diego had the highest level of digital buying of the top 10.

6. San Diego 

2014-2015 Annuity Market Rank: 6

2012-2013 Annuity Market Rank: 5

Guaranteed Income Goal Households Rank: 9

Digital Investment/Retirement Buying Index: 211

Digital Insurance Buying Index: 181

High Annuity Potential ZIP code: 92101

 Dallas

Dallas had the highest growth in market potential in the top 10.

5. Dallas

2014-2015 Annuity Market Rank: 5

2012-2013 Annuity Market Rank: 8

Guaranteed Income Goal Households Rank: 8

Digital Investment/Retirement Buying Index: 119

Digital Insurance Buying Index: 153

High Annuity Potential ZIP code: 75243

Chicago

Lack of growth shows up in a decline in annuity potential ranking for Chicago.

4. Chicago

2014-2015 Annuity Market Rank: 4

2012-2013 Annuity Market Rank: 3

Guaranteed Income Goal Households Rank: 4

Digital Investment/Retirement Buying Index: 132

Digital Insurance Buying Index: 167

High Annuity Potential ZIP code: 60610

Houston

Houston demonstrated a high level of digital buying.

3. Houston

2014-2015 Annuity Market Rank: 3

2012-2013 Annuity Market Rank: 4

Guaranteed Income Goal Households Rank: 3

Digital Investment/Retirement Buying Index: 124

Digital Insurance Buying Index: 133

High Annuity Potential ZIP code: 77036

Los Angeles

Los Angeles has double-digit growth and a high rate of digital buying.

2. Los Angeles

2014-2015 Annuity Market Rank: 2

2012-2013 Annuity Market Rank: 2

Guaranteed Income Goal Households Rank: 2

Digital Investment/Retirement Buying Index: 143

Digital Insurance Buying Index: 137

High Annuity Potential ZIP code: 90049

 New York

Even with a decline in annuity market potential, New York City remains the largest annuity market.

1. New York

2014-2015 Annuity Market Rank: 1

2012-2013 Annuity Market Rank: 1

Guaranteed Income Goal Households Rank: 1

Digital Investment/Retirement Buying Index: 147

Digital Insurance Buying Index: 133

High Annuity Potential ZIP code: 10025

 

See also:

Annuities’ alphabet soup: Choosing the best option

10 compliance challenges annuity providers will face in 2016

Final fiduciary rule: The benefits and burdens for indexed annuities

 

 

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