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Mintel Reports Future Retirees Create New Marketing Avenues
Chicago (October 12, 2006)- Recent reports from Mintel indicate that there are both challenges and opportunities remaining for the annuities industry. Less than half (48 percent) of all respondents to a Mintel consumer survey conducted this year were familiar with annuities, and only 46 percent of those were 65 and over. Of the respondents who were familiar with annuities, more than 60 percent expressed concern with being "locked in"- a significantly higher number than those who cited fees and expenses as a major issue (32 percent).
Total U.S. annuity sales were estimated at $216.5 billion for 2005, and are projected to grow to $261.6 billion by 2009. As the Baby Boom generation reaches retirement, an entire new "retirementality" has emerged- a much more individualized planning experience than seen in years past. As retirees look for more flexible options to address retirement planning, annuity providers are adding features to their products to address these concerns.
"Consumers are looking at retirement in a totally different way, and this is where annuities can find their greatest opportunity for expansion," said Susan Menke, senior financial analyst for Mintel. "Annuities have previously taken a back seat to mutual funds, and now they have the chance to tap into a fresh audience. As Baby Boomers and beyond look for more diverse avenues to grow their retirement funds, annuity companies can take advantage of this."
Mintel's exclusive consumer research further showed that women were more likely to value the safety aspect of annuities. Men were more likely to state that they valued the fact that purchasing an annuity freed them from making investment decisions. These differences illustrate an even greater need for flexibility in annuity products, combined with a reinforced emphasis on safety and security in simplified consumer marketing campaigns.
"So many retirement options are blooming for Boomers now, and companies really need to reposition themselves as having the best possible retirement options," said Menke. "Since consumers are not as familiar with annuities as they are with other investments, these companies will need to work hard to make their products stand out."
Mintel Comperemedia provides competitive intelligence for businesses looking to advance and improve their direct marketing strategy. Tracking direct marketing (including mail, email and print advertising) targeted at consumers, small businesses and insurance agents, Mintel Comperemedia offers a unique perspective on everything from banking trends to insurance trends to credit card statistics. For more than 38 years, Mintel has provided insight into key worldwide trends, leading the industry for consumer, product and media intelligence.
Joanna Peot
Public Relations Executive
312-628-7946
jpeot@mintel.com