Individual fixed annuity holders may be much more satisfied with their contracts in some states than in others.
In 2020, consumers in a typical state replaced about 28 annuity contracts for every 100 new contracts purchased.
Consumers in Utah were much quicker to replace their annuities: issuers there replaced 35.2 contracts for every 100 new contracts issued.
But in five states, consumers replaced fewer than 20 individual fixed annuities for every 100 new contracts issued. (For a list of these five states, see the gallery above.)
The National Association of Insurance Commissioners provides replacement-to-new-issue ratio data for individual fixed annuities to 50 states through its Annual Market Conduct Statement Dashboard Dashboard.
Data
The market conduct dashboard provides market conduct data for many different lines, including individual variable annuities, term life insurance, cash value life insurance, insurance disability and long-term care insurance, as well as for individual fixed annuities.
State insurance regulators need to market conduct data to monitor how insurers treat customers and other stakeholders. The NAIC views market conduct data as a tool that regulators can use to identify insurers or products that may need further investigation.
For individual fixed annuities, for example, the replacement rate data stream is added to four other data streams, such as the types of data streams available, such as contracts replaced when the holder is over 80 years compared to total replacements.
Why numbers matter
Insurance agents, brokers and advisers can use the data to gauge how competitive and aggressive the markets in different states are.
Of course, growers and advisors need to do more research to put the market conduct numbers into context. In some states, certain indicators may appear unusual due to regulatory changes, insurer insolvencies, or other issues not directly related to the active efforts of insurers or others to compete aggressively for business.
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Pictured: Sioux Falls, South Dakota. (Photo: Shutterstock)
