The Hits Keep Coming To Annuity Database


The search for income annuity data showed no signs of letting up in second quarter 2014.

During the three-month period, annuity advisors and sales desks made over 261,000 hits to an online database of income annuity products, according to a new report. That’s up by nearly 9 percent from first quarter’s nearly 240,000 hits.

Although that growth will interest annuity professionals, some trends lurking in the data may be of even greater interest. These are trends about the shape of the income annuity market currently in the making — that is, what advisors are looking for in terms of type of money, size of policies and age of prospective buyers in this market.

The data comes from the online database of Cannex Financial Exchange. The company is the Springfield, Mass., affiliate of CANNEX, a single premium immediate annuity (SPIA) data resource in Toronto, Canada.

The report tallies surveys, or “hits” to the database, made by advisors and sales desks in search of pricing information and product comparisons related to potential income annuity sales in the U.S. The searches are limited to single premium immediate annuities (SPIAs) and deferred income annuities (DIAs).

Defining the market

Cannex’s second quarter numbers show some small but noticeable shifts in what advisors are looking for. These include:

Non-qualified money. Sixty percent of the hits recorded in second quarter involved quotes for nonqualified funds. That’s up from 56.5 percent just three months prior.

The source of these funds is not recorded, but given other factors (such as average age and policy amount), it’s easy to picture this money coming from the client’s personal savings, sale of the family home, inheritance or other such sources.

In second quarter last year, 76 percent of the hits involved non-qualified funds. That’s much bigger than today’s number. However, the 2013 result occurred before two major carriers expanded their use of the Cannex database, making year-over-year comparisons on non-qualified funds not exactly apples-to-apples. The second to first quarter comparisons are more nearly apples-to-apples.

Smaller policies. More advisors seem to be exploring sales of somewhat smaller-sized income policies than previously.

For example, the second quarter report shows a slight but noticeable increase in hits involving premiums in the $75,000 to $100,000 premium category. Among surveys where advisors plugged in the premium, these hits represented 25.5 percent (64,000 hits) of the total in second quarter, up from 22.3 percent in first quarter.

Advisors Guide to Selling IUL This was the biggest premium category, by share of hits, in the report.

By comparison, the next biggest premium category ($100,000 to $200,000) saw no change in share of searches between second and first quarters. In each quarter, this category garnered just 17.4 percent of hits to the system.

The shift to smaller policies appears to be ongoing. In the early days of Cannex’s U.S. income annuity tracking (in 2011), advisors showed more interest in bigger income policies. For instance, in the year-end 2011 Cannex report, the top premium category searched was in the range of $100,000 to $500,000. This category garnered 30.8 percent of the hits.

There was no breakout back then for the $100,000 to $200,000 category, so this comparison cannot be further refined.

The growth in researching smaller policies suggests that advisors 1) may be offering products to more mid-market clients than previously; and/or 2) may be zeroing in on the policy size most comfortable to clients, regardless of net worth.

Slightly younger clients. Today’s advisors appear to be researching policies for slightly younger clients than previously. In second quarter, for instance, the average age (men and women combined) was 65.9. That is down from 67 in the previous quarter, and from 68.8 in second quarter 2013.

In the 2011 year-end report, the combined average age was 69.8, four years above today’s average age.

Not a sales prediction

Cannex executives repeatedly emphasized that the report data show advisor-requested surveys that could potentially result in a sale. The advisors use this information in developing offers for customers. However, the data do not reflect sales that actually result from those offers, the firm said.

Still, annuity watchers will not miss the coincidence or correlation that seems to exist between advisor research activity and actual sales. That is, the growth in searches has occurred at the same time that income annuity sales have increased. In first quarter 2014 alone, SPIA sales of $2.5 billion represented a gain of 47 percent over first quarter 2013, according to estimates from LIMRA Secure Retirement Institute.

Advisors Guide to Selling IUL, MBA, is a contributing editor to AnnuityNews, specializing in life insurance, annuities and income planning. Linda may be reached at

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