blog

2011 - A Transformational Year in the VA Market

By Jesse Mark

In the beginning of the year both ING and Genworth exited the VA space. Other firms, including John Hancock and Amerprise, cut back on their distribution efforts, and just last week Sun Life abruptly announced their intention to stop selling VAs.

Despite strategic decisions by some firms to scale back or wholeheartedly exit the VA market, VAs as a product are here to stay. The 2008-2009 financial crisis is still fresh in investor's minds and increased market volatility is creating a surge in demand for insurance-like products that offer downside protection.

VA providers can't control market movements, but they can control their distribution strategy. To be successful in this challenging and ever changing environment, VA providers will need to focus on selling and servicing via the Web, the ideal scalable resource. Whether providers are looking to ramp up VA sales or cost-effectively service existing contract holders, online content, not traditional wholesalers, is the tool that can be leveraged by an unlimited number of advisors at minimal cost to the firm.

Advisors expect the Web to deliver instant information. In fact, our latest research report Top 5 Variable Annuity Websites for Financial Intermediaries shows that 51.1% of advisors that do significant business in VAs would rather go online than meet with a wholesaler. Unfortunately, there is a notable disparity between the user experiences on most VA provider sites and those found on other financial services sites.

While some VA providers have launched new sites or implemented major web enhancements, a number of firms' websites are causing frustrated advisors to find answers from their competitors.