The Evolution of Annuities Marketplace in the Digital Age

27 Oct 2017
by Skand Bhargava, Somya Bhadola

The annuities market is witnessing major changes to its present ecosystem with the emergence of new technologies, uncertain regulatory directions, shifts in political landscape, and changing customer demands. All these have also raised operational costs for carriers, such as maintaining pricing transparency under Department of Labor’s (DOL) fiduciary reforms would require investments in updates of product platforms, documents, and customer communication. Similarly, in the United Kingdom, with pensions freedom rules emanating a risk of heavy drawdown, many providers have exited parts of their non-strategic product portfolios. All these might result in a more consolidated market, as is already being witnessed in the United Kingdom.

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However, what generates a greater interest in this market is that demand for annuities is very likely to strengthen in the coming years. This might be caused by an expanding Baby Boomers’ population, that is the most favorable customer segment for annuity providers, a volatile interest rate environment that can shift customers to safer income options, and customers’ evolving lifestyles that would need a larger savings pool for retirement than what is provided by social security.

In order to assist annuity providers in creating opportunities out of the present challenges, this paper answers the following set of questions:

  • How are the present market disruptions affecting the carriers’ annuities operations?
  • What are the critical operational areas that carriers should focus on, in order to remain relevant in these transformative times?
  • What steps should the carriers take to adapt their operations to market changes?
  • How would the capabilities developed by service providers assist annuity providers in their transformation process?
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    Insurance - Business Process Outsourcing (BPO)

 

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