Income Annuity Buyers May Be Getting More Patient
Cannex is also seeing more interest in single-life contracts
U.S. income annuity buyers seem to be waiting longer for their income streams to start.
Cannex Final Exchanges Ltd., a financial product pricing information firm, has put data on income annuity benefits start dates in an analysis of the transactions processed through its own quote system.
(Related: Most Lifetime Income Product Owners Like the Products: Cannex)
Cannex included only quote requests submitted by advisors and annuity support desks that pay to use Cannex services.
About 67% of the quotes run in the second quarter were for income annuities with benefits streams starting in fewer than 13 months.
That was down from 74% in the second quarter of 2019, and down from 73% in the second quarter of 2018.
The percentage of queries involving annuities with benefits streams starting at least 13 months in the future increased to 33%, from 26% in the year-earlier quarter, and 27% in the second quarter of 2018.
Cannex also found an increase in the percentage of queries seeking quotes for single-life annuities.
The percentage of queries related to single-life contracts increased to about 60% in the latest quarter. That was up from 56.5% in the second quarter of 2019, and up from 57.5% in the second quarter of 2018.
In a separate report, Cannex described what’s happening to payout annuity yields for the hypothetical clients it uses in its Cannex Pay Index program.
For a 65-year-old single female, for example, the yield for the base contract scenario built into the index fell to 5.4% in June, from 5.68% in December.
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