The Decumulation Beat,
Our First Annual VA Special Editions
We’re devoting the bulk of this week’s and next week’s issues of Retirement Income Journal to the variable annuity market. This week, we focus on the latest products and sales trends. Next week, we’ll delve into some of the issues that cloud the variable annuity industry's future.
Later, we’ll combine all of the articles and data in a microsite within our website, to serve as an ongoing resource for annuity manufacturers, advisors and others who have an interest in this product category. Each year, we’ll conduct an industry review.
The VA industry is searching for new directions, new markets and new story lines. The confidence that the industry used to draw from bull markets has largely been missing in the past year, despite the re-inflation of equity prices. Some companies are enjoying immense sales, but even they would prefer to see the whole industry thrive.
The future may yet belong to variable annuities or to their income guarantees. Five years from now, millions of plan participants might routinely add a guaranteed lifetime withdrawal benefit (or “stand alone living benefit”) to their 401(k) assets, and millions of new retirees might rollover their defined contribution money to a variable annuity in an IRA.
Or maybe not. The variable annuity with a GLWB might become a niche product or perhaps even a relic, as quaint as a Hummer or a video camera that’s so big and bulky you have to rest it on your shoulder. It will depend in part on the economy, both domestic and global. It may also depend on which political party controls Congress, or on who runs the Department of Labor.
The survivability of a particular product is not the most important goal, however. The important thing, at least for those who have a stake in perpetuating the success of insurance companies, is to adapt to circumstance, to continually improve, and to keep all eyes on the prize: designing and marketing tools that help the Baby Boom generation manage its financial risks in retirement.
© 2010 RIJ Publishing. All rights reserved.
Industry Views,
Annuity Issuers Embracing Social Media One Tweet At A Time
In October, our column titled “Should Annuity Firms Care About Social Media” reviewed two recent customer-focused social media projects and debated the importance of annuity issuers establishing a social media presence going forward. In the end, we concluded that given the rising popularity of established social media networks like Facebook among older individuals, it was only a matter of time before annuity issuers became more visible on this medium.
Since then, numerous firms have established Facebook pages and some have even ventured onto LinkedIn. Interestingly, however, the social media network most popular among our firms of late has been Twitter. Four firms we cover—AXA Equitable, Fidelity, Nationwide and TIAA-CREF—created Twitter accounts in the last seven months and have been actively Tweeting since.
Fidelity and TIAA-CREF were the first two firms on Twitter, joining in late October 2009 followed by Nationwide in February. AXA Equitable posted its first Tweet this May. The Twitter pages are similar in that they serve primarily to promote the firm's brand and actively interact with followers. However, the tone and approach the firms use to communicate this information vary greatly.
Although they are newest to Twitter, AXA Equitable has been the most visible and innovative firm thus far. A large promotional image on the AXA public homepage featuring the firm's signature 800 lb. Gorilla mascot announces the firm's arrival on Twitter and links to the firm's profile page. Of the four annuity providers to recently engage Twitter, AXA Equitable is the only one that has publicly advertised its Twitter page with focused promotional imagery.
AXA Equitable Public Homepage Twitter Promotion
The 800lb. Gorilla serves as the face and voice of AXA's Twitter page. The Gorilla's Tweets cover the firm's investment products, retirement solutions and online resources. AXA is also the lone firm to currently offer audio tweets, posts that link to short audio messages from the Gorilla himself.
AXA Equitable Twitter Page
Nationwide also uses a character for its Twitter page—The World's Great Spokesperson in the World. A promotional image on the public homepage links to the Spokesperson's Twitter, Facebook and YouTube pages. Nationwide clearly takes the most light-hearted approach among the firms, posting funny, off-beat commentary befitting of the cocksure Spokesperson's character. Interestingly, the Tweets do not directly promote any of the firm's products or services. Rather, they serve primarily to solidify the connection between the firm and Spokesperson marketing campaign.
Nationwide Twitter Page
Fidelity and TIAA-CREF use more straightforward tones on their Twitter pages. Tweets are almost entirely about the firms' products, services and online content while all commentary focuses on retirement or investment topics or company news.
Surprisingly, there presently seems to be little correlation between entertainment value and popularity. As of this writing, Fidelity has the most followers on Twitter, with over 2,600, followed by TIAA-CREF at roughly 1,100. AXA Equitable has picked up over 300 followers since joining Twitter in May; Nationwide remains under 400 followers.
Rather, it seems a number of other factors influence the number of followers a firm acquires—usefulness of information, promotion on the firm's site itself and frequency of updates are all factors that can affect a firm's popularity on Twitter.
© 2010 Corporate Insight, Inc. All rights reserved.
Industry Views are special reports that are sponsored and independent from RIJ's editorial content.