Annuity innovation is 'alive and well'Demand "has never been greater" and innovation is "alive and well" in the variable annuity industry, according to Bruce Ferris, head of Sales and Distribution for Prudential Annuities.
Ferris says that although variable annuity assets are at an all-time high, the industry is not keeping pace with the growing demand for guaranteed lifetime income. Additionally, he says, investors' risk aversion to equity, as evidenced by the unprecedented flows into cash and fixed income, puts them at risk of not achieving the returns they will need to achieve retirement security. "We’re actively exploring new products—such as Contingent Deferred Annuities (CDAs)—because they allow the guarantee of lifetime income to pertain to a much broader pool of potential assets and, therefore, a broader pool of potential clients," he explains.
However, success in the market is "contingent" on successfully managing risk. "Our unique approach to risk management in the variable annuity space is very much the foundation of how we intend to manage risk in the CDA space," Ferris adds.
Want to learn more about CDAs or speak to Bruce Ferris? Contact Lisa Bennett.
The Prudential Insurance Company of America, Newark, NJ.