U.S. annuity market potential growth — a prospective, forward-looking measure for a product or need that has an analytical basis — stands at 3 percent. Seventy-eight of the top 100 annuity market cities in the U.S. grew at a higher rate, while 22 showed declines. As a group, the top 100 city markets grew 13.6 percent — 4.5 times the overall rate.
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 largest 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.
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Among the top 10 highest growth annuity markets, only two had potential of more than 5,000 households; the remaining eight cities have smaller 2013 bases, and the 2015 annuity model found greater than 50 percent growth rates. Among the 10 largest annuity market cities, New York City and Chicago showed single-digit declines and the rest showed 15 – 50 percent growth.
"The annuity market metric is based on the financial decision making unit — the household — and their contract buying from today's distribution," said IAP's Bill Poll. "When you look inside all cities, the growth is concentrated in about 3,000 ZIP codes that represent more than 40 percent of the annuity market. These high concentrations of market potential and growth indicate that annuities have a broader market than 2.8 million households. IAP's new metric determined that 14.7 million households have guaranteed income as their primary financial objective. Even with the DOL ruling's challenges, there's higher potential for the products."
IAP's ranking of the top 10 highest growth annuity market cities within the top 100 presents additional information that adds further insights including:
Continue reading to see annuity market potential rankings and key dynamics for the 10 highest-growth annuity markets for 2016.
Dallas is the only top 10 annuity potential growth market that also ranked in the top 10 largest annuity market cities.
10. Dallas
2014-15 annuity market rank: 5
2012-13 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
Cleveland has high growth market potential, but low digital engagement. (Photo: Chris Gent/Wikimedia Commons)
9. Cleveland
2014-15 annuity market rank: 55
2012-13 annuity market rank: 77
Guaranteed income goal households rank: 59
Digital investment/retirement buying index: 40
Digital insurance buying index: 47
High annuity potential ZIP code: 44102
Tulsa has high growth and low-trending digital engagement. (Photo:Wikipedia Commons)
8. Tulsa, Oklahoma
2014-15 annuity market rank: 39
2012-13 annuity market rank: 51
Guaranteed income goal households rank: 53
Digital investment/retirement buying index: 90
Digital insurance buying index: 80
High annuity potential ZIP code: 74105
El Paso has high annuity growth potential and low-trending digital engagement. (Photo: LC Rogers/Wikimedia Commons)
7. El Paso, Texas
2014-15 annuity market rank: 50
2012-13 annuity market rank: 68
Guaranteed income goal households rank: 36
Digital investment/retirement buying index: 69
Digital insurance buying index: 70
High annuity potential ZIP code: 79912
Portland has high annuity growth but only average digital engagement for retirement products.
6. Portland, Oregon
2014-15 annuity market rank: 21
2012-13 annuity market rank: 40
Guaranteed income goal households rank: 21
Digital investment/retirement buying index: 105
Digital insurance buying index: 138
High annuity potential ZIP code: 97209
Orlando has high annuity growth and average levels of digital engagement for retirement products.
5. Orlando
2014-15 annuity market rank: 82
2012-13 annuity market rank: 136
Guaranteed income goal households rank: 65
Digital investment/retirement buying index: 97
Digital insurance buying index: 126
High annuity potential ZIP code: 32822
Columbia, South Carolina, had high annuity growth and average levels of digital engagement. (Photo: khenaton06/Wikimedia Commons)
4. Columbia, South Carolina
2014-15 annuity market rank: 85
2012-13 annuity market rank: 171
Guaranteed income goal households rank: 112
Digital investment/retirement buying index: 100
Digital insurance buying index: 113
High annuity potential ZIP code: 29209
Honolulu has high annuity market potential growth and high levels of digital engagement. (Photo:Hakilon/Wikimedia Commons)
3. Honolulu, Hawaii
2014-15 annuity market rank: 48
2012-13 annuity market rank: 80
Guaranteed income goal households rank: 70
Digital investment/retirement buying index: 194
Digital insurance buying index: 86
High annuity potential ZIP code: 96822
Springfield, Missouri, has large annuity market potential growth, but low digital engagement. (Photo: AbeEzekowitz/Wikimedia Commons)
2. Springfield, Missouri
2014-15 annuity market rank: 100
2012-13 annuity market rank: 240
Guaranteed income goal households rank: 94
Digital investment/retirement buying index: 65
Digital insurance buying index: 69
High annuity potential ZIP code: 65804
Boca Raton has huge annuity market potential growth and high digital engagement. (Photo: Elfguy/Wikimedia Commons)
1. Boca Raton, Florida
2014-15 annuity market rank: 98
2012-13 annuity market rank: 242
Guaranteed income goal households rank: 218
Digital investment/retirement buying index: 276
Digital insurance buying index: 137
High annuity potential ZIP code: 33432
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