USAA ranks highest among individual annuity providers for customer satisfaction with a score of 780, according to the recently released J.D. Power 2024 U.S. Individual Annuity Study.
Pacific Life (708) ranks second and New York Life (688) ranks third, with Prudential (676) and Lincoln Financial (674) rounding out the top five. The study average score was 645, based on a 1,000-point scale.
The U.S. Individual Annuity Study was redesigned for 2024, making scores not comparable year over year with previous studies. The updated study measures the experiences of customers of the largest individual annuity companies in the United States across eight core dimensions (in order of importance): trust, value for price, ability to get service, ease of doing business, people, product offerings, digital channels, and problem resolution.
The 2024 study is based on responses from 3,914 individual annuity customers and was fielded from April through July 2024.
Many don’t fully understand annuities
Financial advisors and insurance agents offering individual annuity products are confronting a particularly challenging set of dynamics in the current marketplace, the 2024 study found. The majority (59%) of current annuity customers struggle with their financial health and many do not fully understand the products they are buying.
“Long-term customer satisfaction with individual annuity products is directly linked to customers’ understanding of a fairly complex financial product, which makes agent and advisor communication such an important part of the equation,” said Breanne Armstrong, director of insurance intelligence at J.D. Power. “It’s important to note, however, that true understanding goes deeper than just filling out forms and signing on the dotted line.”
In fact, 43% of individual annuity customers say their agent or advisor filled out the complete application for them and, not surprisingly, those people have lower overall satisfaction scores, Armstrong added. “Advisors and agents need to educate their customers and annuity customers need to make sure they understand the details of what they are getting.”
Annuity providers typically offer a variety of resources to help educate customers on a product. Agents and advisors can encourage engagement with these tools during the onboarding process, even if the agent or advisor completes the application for the customer.
Understanding of the annuity contract and costs and fees is significantly higher when the agent or advisor provides the customer with information on navigating the provider’s website and/or mobile app or directs the customer to available educational videos about the annuity during onboarding.
For more information about the U.S. Individual Annuity Study, visit https://www.jdpower.com/business/insurance/us-annuity-study.
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