How AI is lowering the barrier for annuities sales

Annuities may have had a reputation as a complex, difficult product for advisors to sell, but Zinnia CEO George Esposito believes AI is breaking that barrier down.

“There is a huge opportunity for AI to lower the barrier for distribution and education of that product. Product design and consumer trust is built by using AI tools that increase transparency,” Esposito said.

Esposito noted that the U.S. annuities market has seen significant growth over the past five or six years, and said he expects the trend to continue. Arik Rashkes, head of financial institutions, Solomon Partners, shares that belief, and partially credits the growth to technology-powered education.

“Annuities are not necessarily something that is sold; some people actually want to buy it, and it wasn’t like that 15 years ago. I think that there is much more information with technology — everything you can access, prospectuses and all kinds of tutorials of how to understand annuities nowadays,” Rashkes said.

“Education and innovation are making annuities easier to understand and more customizable than ever,” Liza Tyler, head of Annuity Solutions, Transamerica, and chair of LIMRA’s Annuity Advisor Council, added. “Recent sales records show adoption is climbing, which means barriers are coming down. Advisors who understand a few core designs for different goals and demographics are winning.”

In Esposito’s view, AI can serve as “an enabler rather than a blocker to selling these products to consumers that are really demanding more secure retirements delivered faster and more personally to suit their needs.”

Complexity and growth in annuities markets

Rashkes acknowledged that some advisors may have been reluctant to sell annuities in the past due to its perceived complexity, but suggested that the issue has improved in recent years.

“Annuities didn’t have a great reputation, and I believe that a lot of it has been fixed over the past decade. I can see it in my business; in 2015, 2016, when we talked to private equity investors about the annuity world, it was a lot of hesitation,” he explained.

Now, he believes it’s “actually more understandable than it used to be, and some of it is attributed to the fact that the sales process of annuities has been elevated.”

“I think that advisors are probably getting educated… There’s numerous venues where financial advisors could actually get educated and use the product more,” Rashkes said.

Tyler suggested “the key is confidence.”

“When advisors have a repeatable process and a curated shelf, they can focus on client goals instead of wrestling with paperwork… Advisors who keep it simple, use clear client briefs and lean on digital workflows turn complexity into confidence.”

She noted that today’s clients have “real choice” when it comes to annuities: “MYGAs for guaranteed growth, FIAs for protection with upside, RILAs for defined risk and participation and VAs for market exposure with income options.”

“That variety supports goal-based planning — whether it’s income now, income later or legacy planning — while advisors keep the conversation simple and focused on outcomes,” Tyler said.

Can AI amplify annuity sales?

Adoption of AI has the potential to amplify annuity sales even further, according to Esposito, by “turning wealth advisors into informed retirement experts.”

“AI, for all distributors, can become a co-pilot — not an autopilot… It’ll give advisors access to on-demand education, product translation into plain English, prompts and next-best-action guidance,” he said.

He noted how consumers increasingly trust AI tools, explaining that “anything that allows increased transparency and increased guidance is going to increase consumer confidence.”

“During COVID, there were many consumers and policyholders that got very comfortable using chatbots as opposed to having to sit at the kitchen table with their advisor. I think that digital preference isn’t going away and AI just makes that conversation clearer,” Esposito said.

Already, AI-powered annuity tools are beginning to come on board. One such product is Annuities Genius, an AI software that, in the words of Oleg Shovkun, CTO, Annuities Genius, “does everything for an agent” in a matter of seconds.

“All you need to do is tell the AI the goals of the client, the notes you have from the meeting with the client and then AI thinks of the best strategy for the client. It then presents these annuity solutions in a very simple language,” Shovkun explained.

Platforms like this underscore Esposito’s belief that “AI is not just going to help the distributors sell the product — it’s going to result in a more informed sale, a more confident advisor and a consumer that has been sold a product that really suits their needs.”

Tyler agreed that AI is becoming a “helpful co-pilot” that won’t replace advisors but can “make the process faster and clearer.”

“Think document summaries in plain English, case design comparisons and pre-filled forms that cut errors. Compliance prompts and call summaries keep records tight, and client-friendly explanations can be tailored in seconds. When AI makes the complex simple and keeps everything documented, everyone wins,” she said.

Zinnia is a digital services platform for life insurance and annuities. It was founded in 2005 and is based in Greenwich, CT.

Solomon Partners is an independent investment bank that offers financial advisory services. It is an affiliate of Natixis, of French banking group Groupe BPCE. Solomon Partners was founded in 1989 and is based in New York City.

Transamerica is a major U.S. financial services firm that offers various insurance products. Its parent company is a Dutch financial services company Aegon. Transamerica was founded in 1904 and is based in Cedar Rapids, IA.

Annuities Genius is the B2B arm of Agatha Global Tech, an annuity sales platform. It was founded in 2013 and is based inLaguna Hills, CA.

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Rayne Morgan is a journalist, copywriter, and editor with over 10 years' combined experience in digital content and print media. You can reach her at [email protected].