Annuity Industry Forecast For 2024 | 7 Figure Annuity Sales Podcast | Ep. 279

Welcome back to the Seven Figure Annuity Sales Podcast. Caleb north here, rocking solo again. Chad is actually up in Colorado right now closing on his new home. As many of you guys have heard, he and his family are going to be relocating back up to Colorado and so they had to go up there to close on their new house. Super exciting time for them. But because of that, I am rocking solo today and as you can probably hear in my voice, I am fighting some allergy stuff. So pardon what I've been describing as a more annoying voice perhaps than normal, but I've got some good stuff for us to talk about today. I'm excited for it. We're kicking off the new year here and I want to just kind of share with you guys what I think the annuity industry forecast is looking like for 2024. Some best practices and things that you guys can do to ensure your production level stays the same place it was last year or even improved upon from last year. So what's on the horizon? Are we going to have another record year or are we not? Well, if you look back, let's go back to 2022. Okay, let's go back two years and 2022 market was down almost 20%. S&P 500 ended the year down almost 20% and we had a record sales on the annuity side. Not just retirement realized financial, but industry wide. There was 300 and over $313 billion in annuity premium placed in products over the course of 2022 which beat the previous record set in 2008. For those of you that remember what was going on in 2008, you might start noticing a trend here. You yes, annuity premium is better. It goes up when we have down markets. But the previous record was $265 billion in annuity premium in 2008. And then 2022 set a new record of 313. Well, 2023 rolls along and S&P 500 ends the year positive 24 plus percent. And so you're thinking, okay, stock market was high. What about the overall annuity volume? Well, it was another record year. 2023 had approximately $360 billion in annuity premium. So two years in a row set new records for total annuity volume.

That brings us to 2024. And what do we think 2024 is going to look like? Well.

I'm not a doom and gloomer, but I don't think that 2024 is going to be another record year. I think we are going to see a drawback in overall annuity sales. I think we're going to see a reduction in total annuity sales volume in 2024. And there's a handful of reasons why. I think that, number one, I think the idea of setting a record a third year in a row is just statistically.

An unlikely thing to occur. But there's some actual more data based reasons as to why I think that we're going to probably see a reduction in annuity volume in 2024. Like I said 2023, the S&P 500 did over 24%. What does that mean for consumers? Well, consumers tend to have short term memory, which means that they're probably seeing their investment portfolios that are more risk based types of portfolios performing relatively well, which means that there's less likelihood to be moving money out of something that's performing. So markets perform. There's less movement from those risk based portfolios into things like annuities that are protected from market volatility. Annuity rates are dropping from their high point as well. We've already seen this this year. Migrates starting to come down, index rates starting to come down, even roll ups and bonuses and things like that starting to come down a little bit. So when you have annuity rates dropping and you have markets performing, both of those things are the opposite of what you want to occur for the sake of easy annuity sales. I think if you look back on 2023 and 2022, just because of market conditions.

Really high annuity rates in 2023 and anytime you've got really high rates, even though the market was performing well, people are able to get better guarantees, you're going to see annuity sales go up. 2022, we obviously had regression in market performance. It was negative. And anytime as negative, you're going to see annuity sales go up. That's just the way it is. And a lot of times the sales that occur in those types of years are what I would consider more layup types of sales where, you know, the agents aren't necessarily having to work real hard for the sales that they've got. A lot of agents would have had record years in, in 2023 and 2022 for their own personal production, aside from the industry records that were set. So 2024, when we see the opposite of those things occurring, when we see rates going down on annuities and we see markets performing positively and we don't know where it's going to end up over the course of the year, but at least right now, markets are performing positively Pretty well. That doesn't bode well for easy annuity sales. Are there still going to be individuals that want safety and security, guaranteed lifetime income, those types of things? Of course. But there's going to be those consumers that were purchasing annuities over the last two years because of the market environment that those same types of people may not necessarily be looking to purchase annuities in 2024 because market environment is vastly, vastly different. We've seen treasury bonds have fallen consistently since the end of October, which for those of you that don't know that's going to impact annuity rates. I'm surprised that we're seeing annuity rates drop this many months later and not sooner, but they are starting to come down. And large part of that is because of the treasury bonds. The rates fall in there. I do think rates are going to continue to fall, like I said, over the course of 2022. Another thing to consider is that over the last two years that's $675 billion worth of money that's been placed into annuities and that recent. There's not going to be tons of replacement opportunities. You had high rates. There's not going to be replacement opportunities there. It's just that's a lot of money that's already in annuity products that isn't available to go back into annuity products in 2024. And I think too, the other thing you need to consider is that brokerage firms, your investment firms and things like that, they are significantly increasing retention efforts. I don't know if you guys have noticed this, but I've noticed that the requirement for medallion signatures and signature guarantees, those seem to have gone up. The processing times for transferring money seems to be taking much, much longer. I think what we had over the course of the last two years is a bit of an eye opening scenario for a lot of these investment firms seeing billions and billions of dollars worth of assets being transferred out of their possession into insurance companies. I think as a result of that mass movement money, we're probably going to continue to see some, some tightening and some.

I guess, some those restrictions in those retention efforts going up. So those are the reasons I think that 2024 is not going to be another record year. It could be. We'll see. And like I said, I'm not a, I'm not a Debbie Downer. I'm not a negative Nancy. I really, I really do think that you can have a record year in 2024. Even though we might not see an industry record, there are Things you can do to help your production stay at the same level it's been or even increase it. And there are even some things, economically, globally, politically that are occurring in 2024 that I think could bode well for annuity production. You've got a United States election, we got a presidential election this year that can bode well for annuity production. You've got over 50 other nations that have either a general, a presidential or a parliamentary election going on. Okay, so there's some global uncertainties. You've still got the Russia, Ukraine issue going on. You've got the Pakistan, Israel issue going on. You've got all the stuff in the Middle east, and you've got the China, Taiwan issue going on. So there are global uncertainties. And again, I'm not going to sit here and doom the end of the world by any means. But what I will say is when you have uncertainties, economically, politically, socially, doesn't really matter where there are uncertainties, People are going to be looking for things that are certain. Well.

Product that participates in the upside with none of the downside, or creates some kind of guarantees, things like that. Those quote, unquote, safe money vehicles, to use a marketing term, Those tend to start looking pretty attractive as something to create certainty when somebody perceives a lot of external uncertainty. So just bear that in mind. There are things going on in 2024 that can bode well for annuity production. It's just that the market conditions, the economic conditions, the rate environment, those might not all be going in favor of annuity sales. But I want to encourage you and remind you as well, don't sell on fear. So even though we've got some of these uncertainties going on, you know, in the world, use those more as.

Hope for yourself or confidence for yourself going into these, into these appointments that just because rates may not be as high as they used to be, just because markets might be for performing well, there are still things going on. Just don't use those things going on in the world as fear tactics to try to sell policies to your clients. We don't sell on fear, so maybe not expecting another record year.

There's some things stacked against the annuity production side. That's okay. What do you do to position yourself to not have a drawdown in production and possibly have an increase and possibly have growth in your Overall production in 2024? Yes. Even over 2023 and 2022. How do you do that? Well, there's a couple of things. When we're expecting fewer layups on the annuity sales side, we're expecting fewer clients to just be on their own accord, chomping at the bit, so to speak, to purchase an annuity, it means that the sale is going to be a little bit more difficult for agents. Well, when the sale becomes more difficult, how do you not see a regression in sales volume? Well, there's a few things. Number one, you increase the opportunities, that's fine. You buy more leads, do more marketing, get in front of more people or target people better. Maybe it's less about getting more people and more about getting better opportunities, more of the right demographic of people. So know who you're trying to work with and do some really good marketing that direction. The other piece is that you have to get better in your processes. You have to get better in your sales ability. You have to get better in your understanding of industry products, the way they function, the way they work. You have to get better at understanding what clients are looking for, what they need. You have to get better at explaining how that works so your process can improve. Even though the eagerness of consumers to purchase what you're positioning may not be as high this year, you can improve to offset that difference. So by you getting better, you improving your marketing, your lead generation and your processes, you can position yourself to have an equal or better year than what you've experienced in 2023 or 2022. And yes, I'm speaking even to those of you that had record years. I, I am hopeful that 2024, we can continue that, that growth and we can continue those, those record numbers personally. Even if again, as industry goes, as industry wide numbers go, we may not be seeing those, those record numbers, you know, at large. So that brings me to a few things. If we're emphasizing, trying to not see a regression in overall production and, and we're emphasizing good marketing, good lead generation and better processes, better sales ability as a result or as a reason for not seeing those regressions in sales numbers, then what are we gonna do practically to actually see that occur? Well, we've got good news for you. Over the last year or so, the retirement realized team has been hard at work working on some programs that are actually all slated to roll out here. Q1 of 2024, about four different new marketing and lead generation strategies that we've built and worked on and we're kind of in the final stages, so to speak, of refining and fine tuning. We're not going to roll anything out that we don't have. Empirical evidence is effective. Numbers that show the effectiveness of it, if we roll it out, we want it to be good, we want it to be right. But we are working on some new marketing and lead generation programs for you. You know, stay in front of us, reach out to me over the course of Q1, Q2, and we'll see what we can do to help you get in front of more people and better people that fits your processes in the types of overall annuity business you're trying to run, right? The avenues through which you're trying to run appointments and actually close deals. We've got different lead programs and different marketing systems that cater to different types of processes. But the other thing is we are rolling out a huge upgrade on the training side. So when we talk about sales process getting better, we talk about industry knowledge, product knowledge, just general annuity knowledge and your ability to articulate how these things work and create benefits for retirees, for clients. We've got programs coming out here that are going to do that in spades. A huge project that we've been working on again over the last year or so that'll be coming out and I'm excited for it. So the two areas that we're emphasizing, really developing and focusing on in 2024, the marketing and lead side, and then the sales process side and training and getting better at being an agent, improving your ability as an agent, your expertise as an agent, those two areas are things that we're proactively working on programs to solve those problems for you. So reach out to me, let's have a conversation. Let's talk about what you've done over the past couple of years, what you're looking to do in 2024, and where there's overlap. Let's, let's solve some problems together. And if there happens to not be any overlap, then that's okay. We can go separate ways. You can keep being a podcast listener, that's fantastic. But I'm not, I'm not going to close the door on opportunity to work with you. If that opportunity arises and we've got the tools and resources to support you and help you maintain production or even grow production, then that's exactly what, what I'm here to do and what we want to do. So as a wrap for the forecast for 2024, again, overall industry wide annuity sales volume I think will come down, but we do have some things boating in our favor politically and globally this year and really emphasize those marketing and lead generation strategies and improving your processes. And like I said, reach out to me. Love to have a conversation with you and figure out some some new programs and things that we can get you plugged into to have an equal or better 2024 than what we had last year in 2023. As always, happy selling.

Sam.