Indexed annuity thoughts and predictions with Sheryl J. Moore

By Matt Neuman

Advisors Excel


Recently I had the great opportunity to interview fixed indexed annuity expert, Sheryl J. Moore. Sheryl is the President and CEO of Moore Market Intelligence, and collects data on indexed annuity industry trends and the marketplace. Sheryl has helped me personally stay on top of the industry and ahead of the curve, so I was excited when the opportunity to interview her regarding the current state of our marketplace surfaced.

The 3rd quarter, 2012 (3Q2012) AnnuitySpecs.com Indexed Sales and Market Report was recently released, and I wanted to spend my time with Sheryl getting her insight into the numbers and the trends she’s seeing. Hopefully you find her opinions as thought-provoking as I did.

Matt Neuman: We’re nearly done with 2012 and 75 percent of the year’s sales data is in. How do you think this year has gone for fixed indexed annuities?

Sheryl Moore: Are you kidding? I am absolutely thrilled about indexed annuity sales in 2012. Our third quarter sales were greater than all other quarters in history, with the exception of third quarter, 2010. We are going to blow all records out of the water, come the end of this year. I am projecting that not only will fourth quarter close-out a record year, but that it should be a record-setting quarter as well. Not too bad, considering this has been the most challenging time to sell fixed and indexed annuities!

MN: What trends do you see developing in 2013?

SM: First, there will continue to be a rising demand for indexed annuities due to continued market uncertainty and historical low rates. For these same reasons, we will continue to see many new companies entering the indexed annuity market for the first time.

Rider election for guaranteed lifetime withdrawal benefits (GLWBs) will continue their downward trend. As companies are forced to scale back the attractiveness of these benefits, their popularity will decline.

Lastly, there will be a continued increase in the development of new indexed crediting strategies.

MN: Do you see any new carriers and products making a big impact in the marketplace? Why do you think that is?

SM: I have seen a few new companies making a splash in the indexed annuity market. Although I do not endorse any company or product, not mentioning Allstate, Pacific Life and Security Benefit Life's new products would be an oversight. Allstate's captive distribution has benefited from their simple and straightforward product designs. Pacific Life is making inroads in the bank and wirehouse distributions with a relatively competitive GLWB. Security Benefit Life has caught the attention of independent insurance agents with another relatively competitive GLWB in addition to a new indexed annuity based on a proprietary index. Needless to say, the indexed annuity market isn't lacking for diversity in distribution or product features today.
MN: Do you see other carriers and products declining in market share? Why do you think that is?

SM: Nearly all companies and products in the indexed annuity market are losing market share as a whole. There are so many new companies entering this market due to declining fixed and variable annuity sales. In addition, the low-interest rate environment has sparked new product development, as it always does, resulting in a slew of new annuities.

MN: Lastly, what product advice would you give financial advisors as they decide which products to position in the future?

SM: My best product advice to financial advisors would be to make certain that you understand the needs, objectives and goals of your prospect prior to making any recommendations. Ensure that you know the product like the back of your hand. Then, educate your prospect on the product, in addition to providing your rationale for suggesting it as a solution for them. It is far easier to grow your practice in this manner than to be in a perpetual state of conserving business. And don't forget to CYA — cover your annuities!"

All in all, things are looking great for the fixed indexed annuity industry. Now more than ever, clients need your help and expertise in finding ways to protect their retirements. Take this opportunity to show your clients how you can help them realize their retirement goals. There are more product options and solutions than ever before to help you solve any of your prospects’ needs.

A big thanks to industry expert Sheryl Moore for her insights into 2012 and what to look forward to in our futures.