Retirement Outlook

Driving Retirement Outcomes

U.S. insurance carriers emphasizing annuities and investment solutions with growth potential and downside mitigation features, and prioritizing in-plan solutions

Annual Goldman Sachs Asset Management Annuity Industry Survey also shows major U.S. insurance carriers remain cautious of macroeconomic risks.

(New York, NY, June 6, 2024) – Major US based insurance carriers continue to focus on value propositions driven by investor demand, highlighted by annuity products that provide downside risk management and also allow for upside participation, as well as in-plan solutions that can provide guaranteed retirement income. Artificial intelligence (AI) has emerged as an exciting development, poised to create new investment opportunities for insurers and interest from clients.

These are key findings of the recently released fourth annual Goldman Sachs Asset Management Annuity Industry Survey 2024, Driving Retirement Outcomes. The report summary can be accessed via this link.

“Our latest Annuity Industry Survey reveals how US based insurance carriers are navigating the current market landscape to better equip clients for their retirement journey,” said Marci Green, Head of Retirement Intermediary and Insurance Distribution of Goldman Sachs Asset Management. “The data shows how US annuity providers are focusing on long-term goals and solutions, and balancing macroeconomic risks, to help drive retirement outcomes for underlying investors.”

“This is especially timely as June is National Annuity Awareness Month (NAAM) to help educate Americans on the important role annuities can play as part of a secure retirement savings plan,” said Ms. Green.

Highlights of Driving Retirement Outcomes include:

  • Product Implementation: Buffered Experience. Insurers are focused on delivering protected solutions coupled with potential opportunities. While many respondents offer a traditional Registered Index Linked Annuity (RILA) with standard indices, 45% report buffered solutions/defined outcome investment funds (40 Act vehicles) are the top annuity priority for the next 12 months, driven predominantly by industry demand.
  • Retirement Income: In-Plan Annuity Focus. 71% of firms offer in-plan retirement income annuity solutions. Brand name and plan sponsor relationships are most important in choosing partners, and respondents desire more advocacy and education.
  • Thematic Trends: Spotlight on AI. Data-driven, systematic investing AI techniques are unlocking new business possibilities. 50% of respondents report using AI to increase their sales efficiency. Yet 11% of respondents currently offer AI/big data investment strategies on their annuity investment platforms and 25% are currently considering implementing.
  • Macro Outlook: Risks Remain. The greatest macroeconomic risks in the year ahead are credit & equity market volatility (58%), and a US economic slowdown/ recession (57%), followed by US politics & tax reform and inflation (39% each). Volatility concerns remain top of mind and help to inform product decisions.

Over the next three years, the survey findings suggest that RILAs will continue to rise, RIA adoption of annuity products will pick up, and in-plan annuity adoption will increase.

“What jumps out from our results is that US investors are seeking retirement security, but they do not want to miss opportunities to grow their money, their nest eggs,” Ms. Green said. “They want to be invested in equities, but they also want to sleep well at night knowing they have some downside risk management. The annuity industry’s innovation is again on display given the focus on offering solutions that are designed to meet these needs.”

 

 

 

 

Methodology
Goldman Sachs Asset Management’s Retirement Intermediary and Insurance Business recently conducted its fourth annual annuity industry survey, with a focus on insurance carriers based in the United States. The purpose is to gain insights on overall market sentiment, identify commercial prioritizations, and assess broad trends driving the annuity industry.
Respondents represent a broad range of organizational roles including executive leadership, relationship management, investment selection and oversight, product development and management, sales and distribution, and marketing. Input came from 150 industry participants, a 10% increase over last year, aggregated across 34 insurance companies. Responses were drawn from highly tenured professionals, more than 70% having average tenures greater than 15 years.
About Goldman Sachs Asset Management
Bringing together traditional and alternative investments, Goldman Sachs Asset Management provides clients around the world with a dedicated partnership and focus on long-term performance. As the primary investing area within Goldman Sachs, the business delivers investment and advisory services for the world’s leading institutions, financial advisors, and individuals, drawing from a deeply connected global network and tailored expert insights across every region and market. Goldman Sachs has $2.5 trillion in assets under supervision globally as of December 31, 2023. Driven by a passion for their clients’ performance, Goldman Sachs Asset Management seeks to build long-term relationships based on conviction, sustainable outcomes, and shared success over time.
About Goldman Sachs
The Goldman Sachs Group, Inc. (NYSE: GS) is a leading global financial institution that delivers a broad range of financial services across investment banking, securities, investment management and consumer banking to a large and diversified client base that includes corporations, financial institutions, governments and individuals. Founded in 1869, the firm is headquartered in New York and maintains offices in all major financial centers around the world.