Case Study: Developing Cutting-Edge Proprietary Annuity Products

In 2009, we were hired by an “A” rated carrier with over $14 billion in assets to consult on the product design for a Deferred Fixed Annuity targeted to the broker-dealer and bank marketplace. Insurers are hesitant to develop proprietary products with financial institutions, because there is a history of failed launches. Carriers usually expect a proprietary program to generate $100 million plus. Our success makes Clarke unique. We were selected for this engagement due to our position as the insurer’s number one marketing organization for the previous five years, backed by our then 20 years experience in financial service marketing. While our first priority is always to our clients — the banks, broker-dealers , credit unions, and producer groups we serve — preserving strong relationships with institutional partners is critical to successful annuity platforms. In this case, our partnership with the carrier resulted in a run-rate of one billion dollars of production under management.

Client and Industry Findings

  • The launch of our Deferred Fixed Annuity product was planned when the economy was still in decline. 2008 news headlines reported on the mortgage crisis, credit crisis, bank collapse, and government bailout. Major financial markets lost more than 30% of their value in 2008, according to Investopedia. These losses resulted in low investor confidence. A 2010 Aspen Institute Report, “Retirement Savings Confronting the Challenge of Longevity,” confirms that account balances in 401(k) plans and other private savings vehicles were modest for most American and had been adversely affected by the 2008-2010 Great Recession.
  • Retiree experience of market downturn created shifts in investment strategies toward liquidity and safety. Consumer Affairs highlights this trend, remarking that “the demand for that risk, for the potential upside in the stock market, has shifted sideways. The smart investor is asking where they can go to ensure a stable retirement income.”
  • Developing bank channel annuity programs has challenges due to differing client base motivations. The Center for Insurance Policy and Research white paper on “The State of the Life Insurance Industry,” reports that bank platforms allow the insurer to leverage these new mutual customer bases to increase sales volume and product diversification. However, these cross-sector mergers do not always lead to the desired economies of scale. An insured seeks products offering protection. Customer satisfaction is largely rooted in the degree to which the product fits the customers’ needs and the proficiency to which their needs are handled. Mishandling a claim settlement can have the unintended impact of customers leaving the bank, thus decreasing its overall customer base. Therefore, sensitivity and experience is required when approaching the bank channel with annuity products, and their successful rollout requires expert marketing support.
  • Ideal insurance products for mass-market clients need to be much simpler than the products typically available through independent agents. The broker-dealer and bank approach to bank advisors and their middle-to-low market consumers requires a different type of finesse than independent producers targeting the wealthy.

Recommendations and Conclusions

  • We recommended the design of a simple, annuity product that would provide consumers with the choice they desired. A variety of features and benefits allows the bank advisor to construct a portfolio to address marketplace shifts.
  • We recommended that the proprietary annuity product have the following features:
    • Flexible premiums — Considering the volatility of the US economy, foreclosures, layoffs, and savings losses — we felt that annuitants should be able to pay what they could, when they could
    • Non-rolling surrender — Annuitant liquidity should not be reduced by putting more money into the policy at a later date. By having this contract based surrender charge each addition did not start a new surrender period.
    • Guarantee of principle — During this period of high market volatility, guarantee of principal was paramount. The fixed-rate annuity product portfolio included initial interest rate guarantees generally ranging from one to six years.
  • We recommended that Clarke be allowed to exclusively market this product. In this manner, we managed the risk of product sales failure through these practices:
    • Dedicated focus to the bank and broker dealer marketplace— Clarke has over 207 combined years of experience marketing directly to the bank channel. This means that we understand the subtlety required to successfully do business in this environment, protecting the financial institution from losing assets, and ensuring that proprietary products deliver results to the institution and insurer alike.
    • Respect for client policies and procedures — We follow the guidelines of the broker-dealer and bank. As a marketing organization, we understand how important it is to conduct business in a manner that supports the activities and values of the clients we serve. This means that advisors are only introduced to products that the financial institution has authorized, and that client guidelines from marketing to contract issuance are followed.
    • Advisor focus — We equip producers with personal support, marketing tools, and automated processes. Our support extends to site visits, in-person training, and personalized case management.


  • Our proprietary Deferred Fixed Annuity product generated the highest first-year premiums over all other products for the carrier
  • Our proprietary Deferred Fixed Annuity product generated the highest second-year premiums over all other products for the carrier
  • We went from $0 in sales in 2009 to a run rate in excess of $1 billion.
  • 10 year relationship with the insurer. Continue to be their number one marketing organization.

Partner Opinion

The development of proprietary products for the bank channel provides distinction for the insurer and broker-dealer alike, if they are constructed and marketed properly. Such products can have competitive edge, provided unique features that are not otherwise available. Success is generated when the relative merits of the product are clearly understood by the sales organization, which may necessitate a marketing organization that provides one-on-one wholesaling support to advisors.

Clarke has worked with several carriers to create proprietary and private label annuity and insurance products. If your institution wants to work with an industry expert, then take advantage of our well-designed platform: Clarke Select , Clarke Comprehensive , and Clarke Consulting . We have the carriers, advisor tools , and industry resources to help build you business.