With the turmoil that affected the investment worlds between 2007 and 2011, annuities were one sector that did surprisingly well for investors. By being an insurance product, guaranteed to a specific level by the insurer, holders of annuity investments were able to ride out the declines in the market without major losses. Now that 2012 is here, analysts and experts expect to see annuities continue to be a safe and stable investment.
Over the past year, two companies have stopped selling new annuity products, for various reasons. Many thought these departures would mark the beginning of the end for the annuity market. Instead, it has created opportunities for other companies to attract new customers and expand their holdings in one of the safest investment options available today.
People who have been burned by traditional stock and money market accounts have been looking for an investment that will grow and produce returns, regardless of how modest. These investors have been turning to annuities as a way to rebuild their portfolios. While annuities do not provide the hefty returns of other investments, they are considered safer investments given their backing and guarantees through an insurance company.
The annuity market has been dealing with the loss of insurance companies and carriers, but is weathering the storm. The prognosis for 2012 shows increased investment in annuities and new players in the marketplace. The new competition may force existing carriers to examine the surrender fees and liquidity of the annuity products offered. This could be a new revolution to the annuities market, making them a short-term investment option, instead of a long-term retirement account product.
The next twelve months are expected to bring innovation to the annuity market, while increasing the returns for indexed annuities. Investors could see returns on annuity investments higher than 2011.
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