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How Do You Measure the Effects of Owning an Annuity?

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Annuity market players here in New York for LIMRA’s annual conference came up with an idea for improving annuities’ image: Develop a tool that can show how purchasing annuities has affected the purchasers’ well-being.

Robert Kerzner, the outgoing president of the Windsor, Connecticut-based industry consortium, talked about the effect of annuities on retirees’ well-being today during the opening general session.

Kerzner gave attendees a wide-ranging presentation on how the life and annuity market, and technology, have changed since he came into the life insurance industry, in 1974. He also talked about the challenges that have faced annuity issuers and annuity distributors over the past five years.

“Retirees with retirement plans are more likely to have a better outcome, and they are more likely to own annuities,” Kerzner said.

(Related: Retirement Is Good, Not Great, for More Retirees: EBRI)

Later, during a breakout session on income planning, a member of the audience asked about whether the annuity community has some way to provide “outcomes measures” for annuities, the way a drug company might measure and communicate the outcomes for a new medication.

Matthew Drinkwater, a corporate vice president at LIMRA’s LIMRA Secure Retirement Institute arm, said the organization has data showing how annuity ownership correlates with retiree satisfaction measures. He said he was not sure how to measure the overall effects of annuity ownership on retirees’ or retirement planners’ well-being.

Joe Toledano, a managing director at Morgan Stanley’s wealth management unit, which distributes annuities, said he’s convinced using annuities puts the purchasers in a better place.

“I’m not necessarily sure what the benchmark is to quantify that,” Toledano said. “You’re welcome to use our book of business as a guinea pig.”

— Read Retirement Is Looking Even Worse for Americanson ThinkAdvisor.

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