News editors tend to question whether annuity product news is actually news.
It’s usually about cheerful announcements about new contracts, new strategies for calculating the crediting rates, and new opportunities for agents to earn commissions and bonuses, or for fee-based advisors to earn fees.
Now, annuity product news is about the issuers figuring out how to work from home, slashing product menus to reflect falling interest rates, and trying to reassure financial professionals, other business partners, and themselves that we’ll get through this.
Tamiko Toland, head of annuity research for Toronto-based Cannex Financial Exchanges Ltd., said in a commentary that, even before severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) began causing COVID-19 pneumonia in the United States, annuity issuers were already facing a challenging situation, due to low interest rates.
Now, “we obviously are seeing in this new black swan event,” Toland said.
Here are five ways the current situation is making annuity product news more suspenseful than most in the income planning community would like it to be, drawn from Toland’s commentary and carrier product news updates posted on the web.
1. Representatives from insurers, distributors and retail sales operations are having a hard time getting together in person to talk about products.
The Million Dollar Round Table, for example, was hoping it could start its 2020 annual meeting in Anaheim, California, June 7, on schedule.
But MDRT leaders decided last week that they had to convert the meeting into a virtual event.
2. Insurers are pandemic-proofing their products.
Cannex provides detailed streams of annuity contract data.
Toland said she’s heard of a carrier pulling at least one variable annuity contract off the market; several carriers suspending sales of indexed annuity contracts; and, in some cases, carriers suspending sales of annuities with living benefits or death benefits guarantees.