The number of U.S. households likely to buy an annuity rose 3 percent to 2.76 million in 2016 compared with 2013, an analysis of the annuity market has found.
In the top-three states – California, Texas and Florida – the growth in the number of households likely to buy an annuity far exceeded the national average over the three-year period.
California, Texas and Florida are home to 720,300 households likely to buy annuities. Last year, those three states made up 26 percent of the U.S. household market likely to buy, the analysis by the industry consultant Information Asset Partners (IAP) found.
The number of California households likely to buy rose 16.5 percent to 324,500 households over the three-year period.
California households likely to buy annuities are also 56 percent more likely than the national average to buy an investment online, IAP’s research also found.
The top 10 states with households likely to buy annuities are California, Texas, Florida, New York, Pennsylvania, Illinois, Ohio, New Jersey, Michigan and North Carolina. Together the top 10 states account for 53.4 percent of the likely-to-buy household market.
The predictive buying model was based on MacroMonitor data, which measures financial transactions, credit, assets, protection and information and advice.
Market shares for each of the top-10 states vary from 11.8 percent for California to 3 percent for North Carolina.
Outside of the top-10 states, none has more than a 2.8 percent market share in terms of households likely to buy annuities, the data show.
“The annuity market is geographically concentrated by state and within each state,” said Bill Poll, principal at IAP.
Among the top 10, California, Texas, Florida and North Carolina saw increases in the number of the households likely to buy annuities over the three-year period.
New York, Pennsylvania, Illinois, Ohio, New Jersey and Michigan experienced declines over the period, the data also found.
There are 324,500 households likely to buy in California, 207,100 households in Texas and 188,700 households in Florida.
States with the fewest households likely to buy are Wyoming (5,500), Vermont (6,200) and Alaska (6,700), the study found.
Propensity for Digital Purchasing
The analysis included a “digital investment buying index,” which attributed the incidence of buying investment and retirement products to digital marketing.
The digital index is “a measure of tuned-in-ness,” Poll said.
Digital buying last year was highest in Hawaii at 76 percent above the national average, and lowest in West Virginia at 53 percent below the national average, the analysis found.
Georgia had a digital buying index of 100, the median.
Digital buying metrics vary within the same state.
Austin, Texas, records a digital buying index of 125, or 25 percent above the national average. Meanwhile, San Antonio notches an index of only 85.
“It’s a good example of the differences in the same state when you drill down into the digital buying habits,” Poll said.
In San Jose, Calif., the digital buying index soared to 268, far above the California average of 156, Poll’s data found.
The top five states for making a digital purchase are Hawaii, the District of Columbia, California, Maryland and Alaska, the analysis found.
The bottom five states for a digital purchase are West Virginia, Mississippi, Arkansas, South Dakota and Montana.
Article Published by InsuranceNewsNet March 22 2017 Written by Cyril Tuohy