November 2014: Annuity Client Statement Review

Statements should ideally present clients with their contract values, fees, investment details and recent activity all in an organized and appealing layout. This annual Annuity Monitor Report focuses on the client statements received from firms in our coverage group, with a focus on the appearance, layout and content.

We looked at the following criteria for the report:

  • The statement’s appearance and attractiveness
  • The statement’s layout and organization
  • The type of contract values and details included on the statement

Overall, annuity firms are presenting clients with an informative and well-structured annuity statement. Eight firms in our coverage group received grades in the A-range for their content-rich statements. The firm with the highest grade (A+) provides a plethora of account information such as contract values, investment performance and related fees, and also uses color and graphs to highlight contract information. The remainder of the firms scored in the B-range, with room for improvement in terms of both account data and presentation.

The report shows that all statements reviewed provide clients with their total contract values information, and all but one firm include withdrawals and premium information. Ten firms also provide year-to-date values, and 13 display time horizons stretching back to inception. As for investment information, 82% of firms offer an overview of the funds’ units and values. These firms also offer future allocation details.

The most important factors in terms of presentation include the use of graphs, smart spacing, bold sectional headings and row-shading in tables. Currently, 18 firms highlight key sections and 13 highlight key account values through the use of bold fonts, outlined boxes and underlines – all of which attract more focus on a value or section. The broad use of color in the page layout can also make a statement more appealing, with six firms using varying degrees of color in their statement layout.

Additional key findings include:

  • Two firms feature statements in landscape view.
  • Four statements provide beneficiary information.
  • Six statements include a glossary.
  • Thirteen statements include transaction history information.
  • Sixteen statements include current death benefit value.