Press release

Ruark Consulting Releases 2021 Variable Annuity Study Results

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Ruark Consulting, LLC today released the results of its 2021 industry studies of variable annuity (VA) policyholder behavior, which include surrenders, income utilization and partial withdrawals, and annuitizations. Highlights are available on the company’s website at

“We saw clear dampening effects of the COVID-19 pandemic on VA policyholder behavior. But while many people like to say ‘everything changed’ in 2020, that’s not exactly true,” said Timothy Paris, Ruark’s CEO. “With the benefit of full-year 2020 data, we were able to isolate what did change – and what didn’t. Similar to what we observed during and following the Global Financial Crisis in 2007-8, this has significant financial implications for annuity companies’ modeling of future behavior, including product pricing and risk management.”

Ruark’s 2021 study spanned the period from 2008 through 2020, incorporating data from the full calendar year 2020. It thereby captured effects of COVID-19 and related market movements as they developed throughout the year. COVID-related findings include:

  • Extreme market activity in the first half of the year, disruption to policyholders’ usual communication patterns with advisors and agents by COVID-related social distancing, and the suspension of required minimum distributions under the CARES Act all served to depress surrender and income commencement behavior. The effects were not uniform, however, instead manifesting in specific market sectors as described below.
  • More seasoned contracts persisted at greater rates than expected, independent of rider type or benefit value, coinciding with a decline in annuity market sales volumes. The decline in surrenders is suggestive of a new, unique surrender regime, distinct from the regimes we observe before and after the 2008 financial crisis.
  • Tax-qualified contracts over age 70 ½ commenced utilization of guaranteed lifetime withdrawal benefits (GLWB) at sharply reduced rates in 2020, even as commencement rates for other age-tax cohorts stayed level or increased.
  • GLWB commencement rates were depressed in 2020 among contracts with the highest propensity to exercise the benefit: in-the-money contracts following the end of the deferral bonus period. Both the level and sensitivity of commencement rates were reduced.

Study data comprised 93 million years of exposure and 14.9 million policyholders from 21 participating companies, with $768 billion in account value as of the end of the study period. The study’s in-the-money exposures on GLWB contracts were 31% higher than in Ruark’s 2019 study (completed before the pandemic began) and 64% higher for deep in-the-money contracts. Among contracts issued since 2011, deep in-the-money exposure increased to 12% of total exposure, up from 6% in 2019. The study contained over 900,000 exposure years prior to withdrawal commencement for contract durations 11 and beyond, nearly tripling the comparable exposure in Ruark’s 2019 study.

The study also includes analysis of the effectiveness of GLWB income deferral incentives; sensitivity of income commencement and surrender rates to “moneyness” of guarantees on nominal and economic/actuarial bases; efficiency of income and free partial withdrawal utilization, including systematic withdrawal programs; GMIB annuitization rates for hybrid and pro-rata designs; and much more. Detailed study results, including company-level analytics, benchmarking, and customized behavioral assumption models calibrated to the study data, are available for purchase by participating companies.

Ruark Consulting, LLC (, based in Simsbury, CT, is an actuarial consulting firm specializing in principles-based insurance data analytics and risk management. Since 2007, Ruark’s industry- and company-level experience studies of the variable annuity and fixed indexed annuity markets have served as the industry benchmarks. Its behavioral analytics engagements range from discrete consulting projects to full-service outsourcing relationships. As a reinsurance broker, Ruark has placed and continues to administer dozens of bespoke treaties totaling over $1.5 billion of reinsurance premium and $30 billion of account value, and also offers reinsurance audit and administration services.

Ruark’s consultants are frequent speakers at industry events on the topics of longevity, policyholder behavior, product guarantees, and reinsurance. Their work and commentary have appeared in numerous industry publications. Ruark Consulting enjoys an ongoing collaboration with the Goldenson Center for Actuarial Research at the University of Connecticut.