In the first article of a four-part series, the Insurance sector within the Financial Services Industry Group explores what defines a winner in annuity’s golden age.

As annuity carriers attempt to gain market share, perspective must shift from only cost reduction to maintaining and improving margins. Improving margins is the key to sustainable growth. To capture that growth, annuity carriers will need to contend with several key trends:

• Market Uncertainty
• Greater Reliance on Third-Party Distribution¹
• Continued Decline of Defined Benefit Plan
• Shifting Customer Expectations
• Longevity Risks Breed New Challenges

In our perspective, there are three opportunities for immediate and long-term sustainable growth:

1. In-Plan Annuitization²
2. Customer Education³
3. Distribution Strategy⁴

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1 “Redefining Life And Annuity Distribution”, McKinsey.com

2 LIMRA, “In-Plan Annuities Are Gaining Momentum in the Workplace, Are They Poised to Be the Next Big Thing? Maybe,” 2024. https://www.limra.com/en/newsroom/industry-trends/2024/in-plan-annuities-are-gaining-momentum-in-the-workplace-are-they-poised-to-be-the-next-big-thing-maybe/

3 2024 Study: J.D. Power, “2024 U.S. Individual Annuity Study,” October 17, 2024. https://www.jdpower.com/business/press-releases/2024-us-individual-annuity-study

4 Boston Consulting Group. “Winning the Digital Future of Insurance Distribution.” BCG Publications, May 24, 2024. https://www.bcg.com/publications/2023/insurance-industry-competitive-advantage-with-digital-distribution.

Arthur D. Little. “Designing Insurance Sales Channels for Maximum Impact.” ADL Viewpoints, 2024. https://www.adlittle.com/en/insights/viewpoints/designing-insurance-sales-channels-maximum-impact.

Deloitte Consulting LLP. “Differentiating distribution to boost middle-market commercial insurance partnerships and production.” Deloitte Insights, December 12, 2024.