So busy were individual annuity insurers at raising capital and increasing premium that they may need to take a new look at the products they are offering.

Stephan Christiansen

Stephan Christiansen, director of research at Conning Research and Consulting, said in a statement that insurers must move beyond variable annuities.

“Individual annuity insurers have responded to a slowing rate of growth over the past 15 years with product development heavily focused on variable annuity benefits,” Christiansen said. “Yet as insurers look to the future, it is unlikely that enhancing benefits alone will provide the support it has in recent years.”

A new Conning report on individual annuity insurers suggests “the need for insurers to refine their individual success factors, including superior product development, distribution effectiveness and new market penetration.”

The shift is new, as most insurers have just recently recognized their recovery from the financial crisis.

“The first priority for individual annuity insurers following the financial crisis has been to rebuild capital,” said Scott Hawkins, an analyst at Conning. “Insurers have made significant progress in repairing their capital positions. At the same time, premiums have actually declined, and rebuilding them will be a challenge.”

Hawkins added that each insurer must find new growth, working to “analyze and leverage their unique competitive advantages to position themselves for either organic or acquisitive growth.”