June 26th, 2014 -
“This is the first published
analysis of DTCC Analytic Reporting for Annuities’ inflow data using consumer
financial behavior data,” said Bill Poll at Information Asset Partners (IAP). “Our
retail annuity metric, driven by recent buying behavior, provided an objective
market benchmark for DTCC’s $94 billion
in 2013 ZIP code-level inflows across 117 carriers, 138 distributors, and 3,467
The metric determined that 70%
of the current retail annuity market’s households live in 22% of ZIP
codes. Each of these ZIP codes was
included in the 22% because it represents annuity buying potential that is 3 or
more times higher than its state benchmark.
Given this concentration, IAP focused its analysis on the 2013’s inflows
originating from the 22% within 12 large states. The key finding:
retail annuity market potential is geographically concentrated - Illinois, New
York, and Virginia - the industry was most efficient at capturing market
market potential is geographically dispersed – California, New Jersey, and
Florida – the industry was less efficient
“’Efficient’ means capturing
high annuity potential at comparably high inflow rates: >3X state benchmark
for both annuity buying potential AND 2013 inflows,” added Poll. “Developing this analysis from the ZIP
code-level up provides new market intelligence that will enable distributors to
understand the localized dynamics that advisors are facing and develop new
approaches that build market share. Marketers
are likely to encounter greater growth potential and less competition in states
and territories where the industry is less ‘efficient:’ there’s more unmet
The twelve states represent over
half of today’s annuity market. Within
their respective best annuity markets, Illinois’ efficiency was 96% and Florida
was 42%.” Representing over 10% the
annuity market, California came in at 66%. The US overall, 83%. California, New Jersey, and Florida’s retail
annuity markets are “flatter.” In these
three states more ZIP code-level markets with somewhat lower levels of
potential add up to one-fifth of the US total.
From a distribution perspective, that means more relationships to
develop and support, each facing different retail annuity buyer dynamics.
The report, “Locating the Thin Edge of the
Wedge in Annuity Distribution
is available on IAP’s website. IAP’s recently introduced
solution for annuity distributors and producers – Annuity Market Assessment – was used to develop this
analysis. Further information about the
quarterly market intelligence
is available on IAP’s website.
The linkage between retail market
characteristics and their inflows has implications for annuity marketers and
producers. Distribution can segment and
monitor each financial advisor relationship based on the advisor’s underlying
market conditions and how they are changing.
Annuity Market Assessment’s objective market benchmarks and quarterly
updates provide the means to target advisors and their markets to increase production.
For producers, practice level market
intelligence enables improved marketing ROI, particularly for direct marketing,
and the evaluation of new markets.
Annuity Market Assessment’s
deliverables can be tailored to meet the needs of individual advisors seeking
to expand or improve their annuity production, and carriers, broker dealers,
and insurance marketing organizations with complex retail and institutional
marketing programs seeking to improve ROI and performance.
Information Asset Partners
Founded in 2003, IAP specializes in the
development and application of analytic solutions that focus on marketing
performance and customer value for clients in wealth management, asset management,
insurance, and banking: Measuring where institutional meets retail. For these clients, IAP’s Empirics investable asset, product, and retail financial
behavior metrics provide new, integrated, forward-looking ways to assess their
markets and manage marketing performance.
Information Asset Partners is located in Metuchen,
NJ. Contact IAP at 732.662.1859 or visit www.iapartners.com
for further information.
*Source: Analytic Reporting for Annuities from the Insurance &
Retirement Services of National Securities Clearing Corporation, a DTCC
Subsidiary. Visit www.dtcc.com/analytics
for more information or contact your I&RS