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Providers of annuities, life insurance need to adjust to new financial climate

Posted On Tue, November 17, 2009

A recent study indicates that companies that offer annuities and life insurance will have to adjust because of the recent financial crisis.

According to Conning research, many insurance companies that provide investment opportunities moved toward more "aggressive" assets, which led to gains in 2006 and 2007. However, reduced amounts of capital will make it necessary for companies to change their strategies and offer different products in the near future.

"The 2008 financial crisis and its impact on the life insurance industry will likely resonate with industry executives for some time to come," Stephan Christiansen, director of research at Conning, said, adding that the industry continues to firm up its responses to the financial troubles the country is dealing with.

Along with the industry adjusting its approach, consumers should also keep in mind certain guidelines when they consider investing in an annuity. The Insurance Information Institute notes that there are several kinds of annuities, including those that are fixed or variable. Fixed annuities don't offer as high of a return, though they are less risky than the variable type of investment.

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