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Policyholder behavior is returning to pre-pandemic levels

The three 2022 Variable Annuity Industry Experience Studies conducted by Milliman, Inc., a leading international consulting and actuarial organization, have examined policyholder behavior for 21 firms over 14 years.  The findings show that policyholder behavior was significantly impacted by the pandemic.  The guaranteed minimum income benefit (GMIB) riders’ annuitization, income use, and partial withdrawals are all topics covered in the three studies. According to the research, activity seems to be recovering to its pre-pandemic levels after experiencing large declines in income use for guaranteed lifetime withdrawal benefits (GLWB) and surrender behavior.  According to Timothy Paris, a consulting actuary at Milliman and co-author of the study, the value of policyholders’ lifetime income and death benefit promises is significantly dependent on a person’s conduct through various market circumstances during the product lifespan. These findings show that the pandemic had a major influence on policyholder behavior and give annuity businesses the data-driven information they need to make reasonable pricing, valuation, and risk management estimates even under turbulent market situations. In general, the results demonstrated past research of reduced surrender behavior for variable annuity contracts that use income and even lower surrender behavior when the guarantees are more valuable. According to the research, policyholders are particularly receptive to GLWB designs that offer bigger benefits if they delay income beginning. This response is even more obvious if the benefits increase in value owing to market fluctuations. The research also examined the behavior of policyholders regarding characteristics such as attained age, term, tax status, contract size, guarantee type and value, and distribution channel. 
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Stuart Hunsicker is a managing partner, retirement specialist and federal employee benefits specialist here at Purpose Driven Financial Services. As firm co-owner with Zar Razack, the two have a natural chemistry that allows them to work together effortlessly. “Once we decided to really commit to pushing the firm forward, we knew that we could be effective,” Stuart says. “We work very well together and complement each other’s strengths and weaknesses.”Stuart considers himself more of the “analytical and numbers” half of the duo. With more than 20 years of experience in the financial services industry, he has become an expert at assessing each individual person’s situation and deducing how much they might need in retirement. Once he arrives at the target number, Zar steps in as a specialist to design a plan that includes specific elements that will help clients reach that number.A VCU-Richmond graduate with a degree in finance specializing in business, Stuart has seen nearly every side of the financial industry. Early in his career, he worked for smaller firms and was in charge of trading and investment portfolios. He also held a Series 24 license and signed off on variable business within the firm. “I wore a lot of hats,” he says. “I focused on the investment side, but when the markets crashed, I just took too many phone calls with crying voices on the other end.”Those tough phone calls led him into the insurance side of the business. He now considers “retirement surety” his focal point and believes in making sure that each client is prepared for retirement before they move to the next step. Once the retirement plan is put into place, the rest is icing on the cake, helping give the client financial freedom.PDFS certainly isn’t exclusive, but Stuart is extremely passionate about working with teachers and federal workers. His beautiful wife of nearly 20 years, Andrea, is a teacher, so he’s very familiar with the issues they face and tends to gravitate toward clients who serve and assist. He has also experienced many of the hypothetical scenarios he raises to clients. What if a spouse passes away suddenly, or what if you’re forced into retirement early? Stuart has been there, and he knows how to navigate those rocky waters.He and Andrea have one son, one daughter and eight cats. “We’re the crazy cat house,” he says. His oldest cat is almost 20 years old and was the first to join the Hunsicker family, even before Stuart and Andrea married. The first cat needed a friend, of course, so they adopted one more. Andrea always loved tabby cats, so when her colleague told her that a stray tabby gave birth to a litter of kittens in the backyard, the family loaded into the car to have a look. “When we arrived, there were three kittens. My wife fell in love with the tabby, and my daughter took to a different one, then we couldn’t just leave the third one behind,” Stuart says. “At that point we were known for being the cat people, and it was at that point that three more found their way into our family.”Stuart is a massive college basketball fan, even making a trip to the 2022 Final Four. Though he doesn’t have much free time, he and Andrea love to attend sporting events. Stuart also enjoys spending time with family, and they often go shopping, to the beach or to try new local restaurants. He says, “We’re just a normal family that loves being around each other.”

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