2010 a Year of "Steady Ahead" for Product Development in the U.S. Variable Annuity Market

Morningstar Data Shows Sustained Popularity for Lifetime Benefits,

Steady Innovation in Product Development

WASHINGTON, D.C. - The Insured Retirement Institute (IRI) today released a report on product trend updates within the U.S. variable annuity market for the fourth quarter. Compiled by Morningstar, the report found that product development in 2010 was "steady ahead," with carriers reacting to the positive equity returns with a push toward more generous benefits. Every benefit issued in the fourth quarter was a Lifetime Guaranteed Minimum Withdrawal Benefit (GMWB) in some form, confirming the popularity and utility of these benefits as retirement income vehicles.

Overall, carriers filed 64 changes in the fourth quarter, compared to 63 in the previous quarter. In addition, year-to-year quarterly product changes increased significantly (78%), expanding from a pace of 36 filed changes in the fourth quarter in 2009. Of note, the level of innovation in product development remained steady, with some carriers creating new benefit equations with more attractive features, at a slightly increased price.

"At the onset of 2010, we predicted that the industry would continue to transform its guaranteed lifetime income offerings for consumers, and this year-end data shows that the industry did just that," said Insured Retirement Institute President and CEO Cathy Weatherford. "Nearly 350 changes were filed last year, and among them more than half were either new benefits, new products or revisions to products. Notably, a swing toward more generous benefit offerings for investors were made available, as nearly all of the new benefits released were lifetime withdrawal benefits. As millions of Boomers turn 65 this year, and increase their financial preparations for retirement, the product changes that have occurred will help poise our industry to fill a critical void to provide guaranteed retirement income."

The entire report and analysis can be found HERE.


About the Insured Retirement Institute: The Insured Retirement Institute (IRI) is a not-for-profit organization and is the authoritative source of all things pertaining to annuities, insured retirement strategies and retirement planning. IRI exists to vigorously promote consumer confidence in the value and viability of insured retirement strategies, bringing together the interests of the industry, financial advisors and consumers under one umbrella. IRI's mission is to: encourage industry adherence to highest ethical principles; promote better understanding of the insured retirement value proposition; develop and promote best practice standards to improve value delivery; and to advocate before public policy makers on critical issues affecting insured retirement strategies. Visit www.IRIonline.org to experience the new, vast resources of the new Insured Retirement Institute for yourself.        

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2010 a Year of “Steady Ahead” for Product Development in the U.S. Variable Annuity Market