20 September 2023, Cheltenham, UK
Interest in annuities continues to increase among advisers, despite a gloomy outlook in the overall economy according to iPipeline, a leading financial services technology provider.
The company recently released its report for the first six months of 2023, which shows quotes for annuities were up 65.4% – the highest level since 2014.
iPipeline compared the number of quotes for annuities that were run by brokers on its annuity portal from January through June in 2023 and contrasted it to the same period in 2022. iPipeline’s annuities portal account for 25% of all quotes in the retirement market.
“As interest rates have continued to rise, so has the interest in annuities,” said Paul Yates, Product Strategy Director at iPipeline. “We have continued to see an uptick in clients quoted for annuities by advisers, and the current levels of annuity quotes are at their highest levels since at least 2014.
“Along with rising interest rates, the continued gloomy outlook for the economy may be impacting people’s approach to risk,” Yates added. “As clients gravitate to being increasingly more conservative in their risk appetite — especially those who are older — annuities can become a more relevant choice.”
Yates added that as the demand for annuities continues, it adds increased pressure on providers who may be already struggling to meet service standards using legacy technology.
“The underlying root cause of such struggles lies in legacy technology,” Yates said. “With an increase in annuities, this issue is being spotlighted, and we expect to see more organisations embark on digitisation programmes.”