When you’re anointed the latest hot product, others will naturally take notice and want to follow your lead. So it is with indexed annuities.
According to Conning Research & Consulting, between 2005 and 2010, indexed annuities charted a 9.3 percent compound annual growth rate in the number of in-force contracts. That compares to 1.9 percent for variable annuities and 2 percent for traditional fixed annuities. Since the compound annual growth rate for the target population of likely annuity buyers grew by 2 percent during that same time period, indexed annuities grabbed the largest share of that potential sales pot.
Only time will tell if other firms will emulate Allianz’s strategy, Hawkins says. “If Allianz can prove successful at it, you would certainly expect other companies to think about it and walk through the implications for their own business.”
Yet if others imitate the Allianz model, it could have implications for others who want to enter the field. “All else being equal, it creates certain barriers to entry for those looking to expand or enter this space if they can’t get distributor shelf space,” Hawkins says.