It is interesting to occasionally pause and look back at our industry and see whats changed over the past few years. This clearly is not one of those times when we would say "not much." In fact, it is fair to say that there have been many changes, some subtle, some not.
The most obvious change has been the powerful resurgence of fixed annuities. Suddenly it seems as though safety and security have come back in vogue and fixed annuities are the primary beneficiary.
It is interesting to note that the surge in fixed annuities started well before 9/11. The return to safe products started after technology stocks began to fall and then accelerated through the early part of 2001. It seems as though 20% and 30% returns that were "expected" as ordinary are now a thing of the past. This portends well for fixed annuities, now, and into the future.
One very interesting phenomenon that developed in the post-9/11 world that is worth watching is the surge in life insurance sales. Now that the public is demanding more life insurance, they are meeting more often with insurance agents. Will this translate to more annuity sales? It should. But it only will if the agents actually talk to these buyers about annuities.
Fixed annuity sales have been so driven by the banks and registered reps, I am not sure insurance agents are accustomed to talking about annuities any more. To be sure, some are, but I am afraid many have abdicated this product to other distributors. The perfect time to bring up fixed annuities is now.
What else has changed? Well, variable annuity sales have fallen. This has been somewhat predictable, given the flight to stable-value products. Maybe, they are too far out of favor. Unlike mutual funds, VAs have the death benefit protection that is specifically designed to provide peace of mind in this type of environment. VAs should never become as undesirable as mutual funds in falling markets.
