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Experiential Reality


Over my years covering the industry I’ve often thought that more information on actual client experiences should be shared, in the interest of transparency and education. As one actuary I know who owns multiple annuities told me: “you learn more as a contract owner” – which says a lot, I think, coming from someone so knowledgeable – thus I would argue, by extension, that it would be a cool idea for owners to share anecdotal information on their products periodically.

Every so often at industry conferences I would hear stories about product performance which left me wanting more. One example was an executive who said his company’s immediate variable annuity, one with a large selection of sub-accounts, provided steadily increasing payouts over time, resulting in an impressive amount of income on a cumulative basis. As a caveat, this was during a bull market period; I’m guessing the reason why the IVA is no longer “a thing” these days is that the market has been rather volatile which would cause variable payments to fluctuate.

And therein lies the problem. I do understand insurers’ reluctance to cite client experience willy nilly as such information can be misinterpreted, exaggerated, misused. Haven’t we all seen “best case/worst case” illustrations that make a strategy look a bit too good to be true?

Fast forward to the recent past where, on social media, I’ve been seeing industry folks post actual performance of their indexed annuity and life products. I find this a welcome thing. One such poster promised to show how his FIA does in bad times and in good; let’s hope he sticks to that.

I do suspect that some of these postings are motivated by a desire to counter critics of FIAs and IULs, who say that the illustrations used to sell them are overstated and/or of questionable value – particularly if they involve back testing. I won’t get into that topic right now, but it is certainly one that is being debated quite hotly in certain quarters.

My view is getting more information to customers is usually an unqualified good thing. Technology is accelerating this process, and it appears that insurers are adopting the latest solutions faster than ever before. While may be slightly off topic, have you seen the announcements about “instant issue” life policies? Perhaps that’s the future: insurance sales at the touch of a button.

And I’m not quite ready to contemplate what AI might mean for this business.

One thing’s for sure: more information is being disseminated than ever before, and this should help advisors and clients become better educated and make better decisions.


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