Life, annuity app delays frustrate producers

Total annuity sales surged to $310.6 billion in 2022, a 22% increase from 2021 results and 17% higher than the record set in 2008, according to LIMRA’s U.S. Individual Annuity Sales Survey.

“Rates have continued to be very competitive, especially relative to CDs,” Moore explained. “That speaks very well for sales of [MYGAs]. Never mind indexed annuities, which should also fare very well.”

Insurers have long outsourced administration services to third-party companies, Moore said. Likewise, many insurers are now outsourcing phone services as well, she added, calling the trend “bananas.”

It means that someone calling an insurer is going to have an added layer of difficulty reaching the right person.

“Apparently, this is contributing to the long times to issue a case,” Moore added.

Bruce Friedland has more than 30 years in the life insurance industry. It is not uncommon for insurers to get caught without enough people power to meet a surging demand, he said.

“They run into servicing challenges, and there are often shortfalls in what companies are able to deliver,” said Friedland, who left Vantis Life Insurance Co. in 2021 to start his own consulting business.

by John Hilton

In a technology world where transactions are moving faster and faster, life and annuity applications are heading in the opposite direction.

Producers are growing frustrated by the extra weeks it is taking to complete apps.

Sheryl Moore is president and CEO of Moore Market Intelligence and Wink Inc. She also has an influential social network and posted about the delay issue last week on LinkedIn. The responses flooded in from irritated producers.

Speculation on the source of the delays ranged from staffing shortages to technology deficiencies to insurers just caught off-guard by a possible sales boom.

“The home offices are likely understaffed and unable to handle the influx of business,” she added via email.

“I have seen this in the past, back in 2008, 2009.”

Back then, fixed annuity sales boomed in the aftermath of the financial crisis, which wiped out retirement accounts. The same thing is happening again.

It can be a challenge for insurers to maintain staffing levels amid so many variables, Friedland said. In addition to sales surges, changing regulations can make the client analysis a lengthy process.