2011 Annuity Sales State-By-State & Age-Weighted Factors

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1 NAFA 1 Marrion 2011 Annuity Sales State-By-State & Age-Weighted Factors This report is based on an analysis of Annual Statements filed by fixed and variable annuity carriers with regulators and then pulling out the individual state-by-state annuity sales under Schedule T within those statements. The selected carriers represented 81% of fixed annuity and 81% of variable annuity production. To determine the 2011 variable, fixed rate, fixed index and fixed immediate annuity sales the Beacon Research Fixed Annuity Premium Study was used, as well as the Morningstar Top 25 sellers of variable annuities (26 February 2012) and the U.S. Individual Annuities Sales Survey, LIMRA Total (variable, fixed rate, index, immediate) Annuity Sales $2,944,005,759 Montana $516,106,290 Alaska $289,994,304 Nebraska $1,287,695,821 $4,836,394,769 Nevada $1,324,536,492 Arkansas $1,535,846,399 New Hampshire $1,495,312,892 $22,378,900,124 $10,937,405,099 $4,295,436,378 New Mexico $929,440,581 $3,749,356,489 $9,137,791,140 DC $485,190,792 North Carolina $6,652,344,833 Delaware $2,431,080,902 North Dakota $586,473,304 $18,186,021,965 $10,119,287,256 $5,000,383,947 Oklahoma $1,780,346,217 Hawaii $1,463,495,116 Oregon $2,334,457,363 Idaho $951,037,195 $12,616,293,335 Illinois $9,773,331,229 Rhode Island $1,020,058,647 $4,779,743,928 $3,232,108,773 Iowa $2,466,715,696 South Dakota $577,400,271 Kansas $2,052,659,175 $4,433,148,206 Kentucky $2,427,079,750 Texas $14,371,573,169 $3,399,328,611 $1,928,614,827 Maine $1,032,762,062 Vermont $508,420,118 $4,805,853,765 $5,803,432,411 Massachusetts $6,495,533,943 Washington $4,296,508,042 $9,281,060,222 West $1,185,076,533 $5,003,133,366 $4,785,986,875 Mississippi $1,363,733,779 Wyoming $320,833,161 $5,396,711,543 extrapolated from actual sales representing 80.71% of total sales I have high confidence that the percentages and sales results for overall sales (variable, fixed, index, immediate) reflect actual sales by state. The numbers are extrapolated from actual state-by-state sales taken from the individual Annual Statements of carriers that account for over 80% of both variable and fixed annuity sales. (i.e. if you looked at statements representing 100% of sales instead of 80% I am confident that would still be very close to 9.77% of total sales, 7.94%, etc.).

2 NAFA 2 Marrion Total Sales Broken-down By State By State Percentage Of Total Sales Top 10 Overall Top 10 VA* Top 10 FA** % % % % % % 3. Texas 6.28% % 3. Texas 7.38% % % % % 5. Texas 5.48% % % % % 7. Illinois 4.27% 7. Illinois 4.33% 7. Illinois 4.32% % % % % % % 10. Massachusetts 2.84% 10. Massachusetts 3.22% 10. North Carolina 3.26% Bottom 10 Overall Bottom 10 VA* Bottom 10 FA** 42. Maine 0.45% 42. Maine 0.46% 42. Maine 0.45% 43. Idaho 0.42% 43. New Mexico 0.41% 43. Rhode Island 0.31% 44. New Mexico 0.41% 44. Idaho 0.39% 44. Delaware 0.27% 45. North Dakota 0.26% 45. DC 0.28% 45. South Dakota 0.27% 46. South Dakota 0.25% 46. Vermont 0.27% 46. North Dakota 0.21% 47. Montana 0.23% 47. North Dakota 0.25% 47. Montana 0.16% 48. Vermont 0.22% 48. South Dakota 0.22% 48. Alaska 0.13% 49. DC 0.21% 49. Montana 0.20% 49. Vermont 0.13% 50. Wyoming 0.14% 50. Wyoming 0.13% 50. Wyoming 0.11% 51. Alaska 0.13% 51. Alaska 0.11% 51. DC 0.07% * Based on the 9 carriers representing 66% of variable annuity sales, with variable sales being substantially all of these individual carrier sales: AIG Valic, Jackson National (89%), MetLife VA, Metropolitan, Nationwide (96%), Pruco NJ, Prudential, Riversource (92%), TIAA. ** Based on 16 carriers representing 42% of fixed annuity sales, with fixed sales being substantially all of these individual carrier sales: AIG American General, AIG Western National, American Equity, Ameirican National, Aviva, Equitrust, F&G, Great American, ING, Midland National (90%), National Western, North American, Phoenix, Reliance Standard, USAA, and Western Southern. Allianz is also included. I have high confidence that the percentages for variable annuity sales reflect actual sales by state patterns. I was able to find nine carriers representing 66% of total variable sales where the carriers essentially sold only variable annuities. These state-by-state breakdowns are the overall percentages of sales for these nine carriers. Are the state-by-state sales percentages for these nine carriers representative of all variable annuity carriers? With the exception of the percentage of VA sales that a particular state represents stays generally consistent for these nine carriers. I then approached this by taking overall sales and subtracting sales from 17 carriers that represented over 50% of reported fixed sales. What was left was a total composed of all the reported variable sales and half of the fixed sales. The state-by-state breakdown of the composite mixture was also extremely close to the state-by-state breakdown of the 9 carriers representing 66% to total variable annuity sales even though the data pool was twice as large. I am comfortable with the variable annuity picture of state-by-state sales presented by this data.

3 NAFA 3 Marrion I have medium confidence that the percentages and sales results for fixed annuity sales (fixed rate, index, immediate) reflect actual sales by state. Fixed annuity sales were more difficult to pull out. Although fourteen carriers sold basically nothing but fixed annuities, and with two more carriers fixed sales were over 90% of their total sales, there were many carriers that were split between fixed and variable and I was unable to tell what the split was. A prime example would be Allianz. Allianz has almost a fifth of the fixed index annuity market, but 37% of their annuity sales are variable. Although I can see the total Allianz annuity sales in a particular state I cannot see how much is variable and how much is fixed, and I do not know whether the fixed and variable sales would follow the same pattern as the overall sales. However, it you include the state-by-state percentages for Allianz you get almost identical state sales patterns, therefore I have included Allianz percentages, this means that the results represent 50% of fixed annuity state-by-state sales. Even so, extrapolating a result intended to be accurate for 100% of the field is dicey when you only have 50% of the actual results. The standard deviation was quite pronounced for several states and sometimes got larger as the data set increased. In other words, in some states there was a big difference between the percentage of fixed sales that the state presented depending on the carrier. With the exception of Delaware and the carrier results for variable and overall annuity sales tended to more tightly grouped. What this means is I am not sure whether the pattern for the fixed annuity stateby-state results I was able to find is the true pattern for all fixed annuities sold in Differences Between Variable and Fixed State-By-State Sales Break-down Overall the percentage of sales a particular state represents is usually very close whether those sales are variable or fixed. In states such as Idaho, Illinois,, Kansas,,, West and Wyoming there are only a few basis points difference between the state s contribution to fixed or variable. Even accounts for 8% of total sales for either fixed or variable products. However, in some states the difference is more significant. represents 11.3% of fixed sales but 9.2% of variable, Texas accounts for 7.4% of fixed sales but 5.5% of variable, and is almost twice as valuable to fixed carriers (3.5% fixed, 1.9% variable). On the variable side the most striking difference is which represents 5.3% of all variable sales, but only 0.5% of fixed. Percentage of 2011 Annuity Sales By State 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% DC Idaho Kansas Mississippi Variable Montana Nevada Fixed North Dakota Oklahoma West Wyoming

4 NAFA 4 Marrion Age & Annuity Sales State Percentage of Population Age 45 Or Older (Natl Avg 39.85%) 29.09% 34.43% 34.65% 35.80% 36.56% 36.80% 37.70% 37.89% District of Texas Alaska Idaho Nevada 38.23% 38.87% 38.88% 38.92% Mississippi 39.08% Illinois 39.28% Kansas 39.35% Oklahoma 39.52% Nebraska North Carolina Washington New Mexico Wyoming Arkansas North Dakota South Dakota Kentucky Haw aii Oregon Iow a Massachusetts Delaw are Rhode Island Montana New West Vermont Maine 39.72% 39.72% 39.73% 39.84% 40.10% 40.43% 40.46% 40.54% 40.68% 40.72% 40.83% 40.87% 40.88% 40.96% 40.98% 41.10% 41.31% 41.58% 41.60% 41.64% 41.76% 41.84% 42.04% 42.22% 42.23% 42.28% 42.78% 43.28% 43.88% 44.22% 44.83% 45.06% 45.50% 45.95% 47.50% 28.85% 30.85% 32.85% 34.85% 36.85% 38.85% 40.85% 42.85% 44.85% 46.85% Approximately 40% of the population is age 45 or older. The reason I used age 45 as a cutoff is it appears that would include a minimum of 95% of all annuity purchases and it could be as high as 98%. The reason for the fudging is I could not find hard current data showing purchases by age group. Most of the data indicated that, with the exception of 403(b) plan contributions that almost all fixed annuities were purchased by those over age 55 and almost all variable annuities were bought by 50 plus buyers. Even including the 403(b) and 457 plan purchases by younger people my best guestimate is age 45 is a good bottom point for annuity buying age.

5 NAFA 5 Marrion If you are looking at your prospect pool on only a percentage basis you d want to set up in Maine where about 1 out of 2 people walking down the street is age 45+. By contrast, only about 1 in 3 people in a town square in Texas meets that criterion. However, there are lot more people in Texas than in Maine so there are more prime prospects in the population. Population Age 45 Or Older ,868,818 1,778,069 Texas 8,896,378 Oregon 1,612,269 8,543,277 1,549,621 7,918,540 Oklahoma 1,491,906 5,592,199 Iowa 1,278,836 Illinois 5,028,888 Arkansas 1,196,210 4,875,028 Mississippi 1,159,155 4,175,319 Kansas 1,127,715 North Carolina 3,835,951 Nevada 1,041,163 3,669,695 West 844,160 3,588,637 New Mexico 835,059 3,215, ,571 Massachusetts 2,769,344 Nebraska 728,221 Washington 2,713,626 Maine 630,920 2,617,993 Idaho 597,611 2,596,450 New Hampshire 593,931 2,520,467 Hawaii 571,630 2,483,308 Rhode Island 449,782 2,389,794 Montana 441,441 2,356,575 Delaware 382,992 Average* 2,250,000 South Dakota 336,777 2,162,731 Vermont 287,842 1,967,958 North Dakota 279,220 1,938,822 Alaska 258,709 1,923,152 Wyoming 230,323 Kentucky 1,789,875 DC 212,761 * is treated as an outlier and not used to determine the average Although only 1 in 3 Texans is age 45+, when you add up all those third people you get 8,896,378 which is seven times the entire population of Maine. But you can t simply ignore the percentages because the population and the percentage represented may help define the marketing strategy. Ads for an annuity or annuity seminar in Maine s Portland Press Herald, and Morning Sentinel might reach 200,000 age 45+ prospects at a reasonable cost because the entire population for this area is around 400,000. By contrast, Austin Texas proper has roughly 209,000 people over age 45 ( clrsearch.com/austin_ Demographics/TX/Population-by-Age), but that s out of a total population of 800,000. An ad in The Statesman would cost much more than one in the Press Herald, but the impact on the age 45+ group would be the same. In Austin perhaps the best approach is a targeted mailing. The reason to look at states with a large 45 or older population is that should cover almost all potential annuity buyers. This then raises the question whether people in all states buy the same amount of annuities on an individual basis. We have hard data that shows the 13.9 million older population in buys more annuities than the 0.21 million age 45+ population of the District of Columbia, but does the average person in buy more annuities than the average person in DC? Do people in one state demonstrate greater receptivity to an annuity purchase than those in another? The answer is yes.

6 NAFA 6 Marrion Per Capital Annuity Sales In 2011 there were 124,174,484 Americans age 45 or older. In 2011 there were $229,005,442,864 of variable and fixed annuities purchased. On a per capital basis this works out to $1,816 of annuities purchased by each age 45 plus American. However, ans bought $11 billion of annuities last year and there are 3.7 million that are age 45 or older on this basis the per capita purchase was $2,980. By contrast, ers bought $9.1 billion of annuities and there are 7.9 million age 45 plus the per capita sale works out to $1,154. In other words, it appears the average an bought three times the annuities that the average er purchased. Even though has less than half the age 45+ population of it still buys $2 billion more annuities. Clearly some states have demonstrated a greater proclivity for annuities than others. If we can identify these states, and their market size, wouldn t this help determine the states in which to concentrate marketing efforts? Average per capita Annuity Sales (Age 45 or older) Delaware ** $6,348 $1,805 $2,980 Nebraska $1,768 Hawaii $2,560 Vermont $1,766 New Hampshire $2,518 North Carolina $1,734 $2,420 South Dakota $1,714 $2,353 $1,693 Massachusetts $2,346 $1,681 $2,313 Maine $1,637 DC $2,280 Texas $1,615 Rhode Island $2,268 $1,614 $2,256 Idaho $1,591 $2,223 Washington $1,583 $2,215 $1,496 $2,173 Oregon $1,448 $2,129 West $1,404 North Dakota $2,100 $1,393 $2,076 Wyoming $1,393 $2,039 Kentucky $1,356 $2,003 Arkansas $1,284 Illinois $1,943 Nevada $1,272 Iowa $1,929 Oklahoma $1,193 $1,919 Mississippi $1,176 $1,912 Montana $1,169 $1,841 $1,154 Kansas $1,820 Alaska $1,121 Average $1,816 New Mexico $1,113 **Delaware acts as trustee for several carriers so sales are reported as being made in Delaware even though the natural person lives elsewhere. The Delaware number was not used to calculate the average per capital sale

7 NAFA 7 Marrion Average Annuity Sales per capita New Mexico Alaska Montana Mississippi Oklahoma Nevada Arkansas Kentucky Wyoming West Oregon 0.87Washington 0.88 Idaho Texas 0.90 Maine South Dakota 0.95 North Carolina 0.97 Vermont 0.97 Nebraska 0.99 Average Kansas Iowa Illinois North Dakota Rhode Island DC Massachusetts New Hampshire Hawaii I calculated the sales per capita by dividing total state annuity sales for each state by the population age 45 or older. The national average annuity sale was $1,816. I then divided the state s average sale by the national average to determine to what percentage the state s per capita sales were above or below the national average. It turns out the per capita annuity purchase of a an was 64% bigger than the average U.S. purchase and the purchase for a New Mexican was 39% less. What this means is either more New Jerseyans buy annuities than New Mexicans or the average annuity sale to a an is considerably larger than the sale to a New Mexican or both. Consumers in states with a per capita number greater than 1.00 buy more annuities and those in states with a number lower than 1.00 buy fewer annuities or have lower average sales sizes. Is this meaningful? Yes, as a part of the answer.

8 NAFA 8 Marrion has a per capita annuity buying number of 1.3; New Mexico s number is Each state has a similar population of people age 45 or older 810 thousand for and 835 thousand for New Mexico. Since the target population is roughly the same, but spends 30% more on annuities per capita than the national average and New Mexico spends 39% less, then the people of buy twice as many annuities as do the people of New Mexico. If you had limited marketing dollars it appears that would be a better place for those dollars. However, you can t use the per capita number alone. Hawaii has a per capita annuity number of 1.4. has one of 0.8. On an individual basis Hawaiians buy 80% more annuities, but has over six times the number of potential annuity buyers, which is why ns purchased $5 billion of annuities and Hawaiians bought $1.5 billion in What this means is one should look at both the per capita sales and the buying population to determine which states are the most attractive annuity marketing targets. Deviation from Average Population (Age 45+) 0.09 DC 0.10 Wyoming 0.11 Alaska 0.12 North Dakota 0.13 Vermont 0.15 South Dakota 0.17 Delaware 0.20 Montana 0.20 Rhode Island 0.25 Hawaii 0.26 New Hampshire Idaho Maine Nebraska New Mexico West 0.46 Nevada Kansas Mississippi 0.53 Arkansas 0.57 Iowa Oklahoma Oregon Kentucky Washington Massachusetts North Carolina Illinois Texas

9 NAFA 9 Marrion Annuity Market Buying Power Factor The annuity market buying factor multiples the state s average annuity sales per capital by the state s deviation from the average population of people over age 45. The resultant number is the annuity market buying power factor the demonstrated annuity buying power for each state. The annuity market buying power factor looks not only at the size of the potential state annuity market, but also at the proven proclivity of its citizens to buy annuities. It provides a single number that can be used to compare the potential for sales based on the number of prospects and actual annuities purchased. In doing so it provides for greater interpretation than using a strict demographic approach. Annuity Market Buying Power Factor - Age 45+ Texas Illinois North Carolina Massachusetts Washington 0.60 Iowa 0.59 Kentucky 0.57 Oregon 0.50 Kansas Oklahoma 0.38 Arkansas 0.37 New Hamp 0.36 Hawaii 0.33 Mississippi 0.32 Nevada 0.32 Nebraska 0.29 West 0.25 Maine 0.25 Rhode Island 0.23 New Mexico 0.23 Idaho 0.17 Delaware ** 0.14 South Dakota 0.14 North Dakota 0.13 Montana 0.12 Vermont 0.12 DC 0.08 Wyoming 0.07 Alaska

10 NAFA 10 Marrion For example, has the tenth greatest population of residents age 45 or older, but is exceeded in population by Illinois, and. However, since ans buy more annuities on a per capita basis than the other states they have a higher buying power factor. Everything else being equal, concentrating marketing efforts on should provide more sales than an equivalent effort in any of these other states. Another example: may be considered a better than average market due to its reputation as a retirement center; may not be considered at all. However, with similar size age 45 plus populations and based on actual annuity buying habits is more attractive than from an annuity marketing point of view. The annuity market buying power factor may help reshape certain assumptions, confirm others and raise questions. and remain as prime annuity markets, but is more attractive and is less attractive than may have been believed. Nevada is viewed by some as an attractive market with over 1.0 million age 45+ residents, but it has the same annuity buying power factor as Nebraska with only 0.7 million. What needs to be done to increase Nevada sales? Senior Age & Annuity Sales In 2011 there were 48,464,533 Americans age 63 or older, approximately 16% of the population is age 63 or older. The reason age 63 is used is 50% of annuity buyers are in this segment (this includes everyone buying an annuity, the average variable annuity buying age is in the late 50s, average index and fixed rate buyers are age 66 to 67 and LIMRA reports the average immediate annuity buyer age is 73. I picked the 63 rd birthday as a reasonable cutting place for the split). Population Age 63 Or Older ,151,942 Oregon 652,695 3,854,437 Oklahoma 603,385 Texas 3,196, ,326 3,105,310 Iowa 527,812 2,299,511 Arkansas 500,019 1,929,969 Mississippi 455,531 Illinois 1,917,589 Kansas 444,954 1,626,893 Nevada 404,046 North Carolina 1,509,301 West 353,270 1,409,690 New Mexico 332,327 1,286, ,963 1,197,689 Nebraska 289,765 Massachusetts 1,078,287 Maine 254,641 1,073,904 Idaho 237,807 1,037,466 Hawaii 235,667 Washington 1,025,492 New Hampshire 219,519 1,004,829 Rhode Island 179, ,649 Montana 177, ,623 Delaware 156, ,885 South Dakota 136, ,944 North Dakota 113, ,847 Vermont 111, ,917 Wyoming 85,782 Kentucky 697,454 DC 82, ,140 Alaska 72, ,119

11 NAFA 11 Marrion State Percentage of Population Age 63 Or Older (Natl Avg 15.74%) 10.01% 10.79% 12.45% 13.11% 13.34% 13.47% 13.67% 14.74% 14.79% 14.81% 14.84% 14.90% 15.00% 15.01% 15.10% Alaska Texas DC Nevada Illinois Idaho Washington Wyoming Mississippi 15.29% 15.30% 15.42% 15.50% Kansas 15.63% North Carolina Nebraska Oklahoma New Mexico Kentucky Massachusetts North Dakota South Dakota New Hamp Oregon Arkansas Rhode Island Haw aii Iow a Delaw are Vermont Montana West Maine 15.73% 15.91% 15.95% 15.96% 15.96% 15.98% 16.15% 16.20% 16.37% 16.42% 16.47% 16.55% 16.55% 16.56% 16.57% 16.65% 16.67% 16.72% 16.79% 16.86% 17.02% 17.05% 17.14% 17.24% 17.27% 17.78% 17.80% 18.05% 19.04% 19.17% 20.23% The same exercise can be done with this older demographic to determine the annuity market buying power factor. However, since I do not have an age breakdown of the annuity sales I have to make assumptions. The assumption is that the state average sales per capita percentage patterns for 100% of the buyers will hold true for 50%, but I have no hard data to support this.

12 NAFA 12 Marrion Annuity Market Buying Power Factor - Age Texas Illinois North Carolina Massachusetts Washington 0.65 Iowa 0.60 Oregon 0.60 Kentucky Kansas Oklahoma Arkansas Hawaii 0.35 New Hampshire Mississippi Nevada Nebraska West Rhode Island Maine Idaho New Mexico Delaware ** South Dakota North Dakota Montana Vermont DC Wyoming Alaska For most states the differences between looking at everyone age 45 plus or everyone age 63 plus were slight. and are still the strongest annuity states, Alaska and Wyoming the weakest. Perhaps the most noticeable difference is has the same strength as Texas if you look at the age 63 and older market. Again, this assumes that groups of, say, 70 year old buyers in the different states buy annuities in a like manner with 55 year old buyers in the same state. Fixed & Variable Annuity Market Buying Power Factors As previously stated, I have high confidence that the percentages and sales results for overall sales (variable, fixed, index, immediate) reflect actual sales by state. The state populations of those residents age 45 and older, and 63 and older are taken from the 2011 estimates from the U.S. Census Bureau. Although the population figures remain true, more assumptions are necessary if one tries to determine the annuity buying power factor of only variable or only fixed annuities.

13 NAFA 13 Marrion The problem is my data is not broken-down into variable and fixed sales by states, although I usually know the percentage breakdown of the national overall sales. However, many carriers sell exclusively, or almost exclusively, variable or fixed products so their state breakdown would reflect applicable sales by state segments. I was able to find nine carriers representing 66% of total variable sales where the carriers essentially sold only variable annuities; these aggregate results are used as a proxy for total variable sales. I also found sixteen carriers where the sales were essentially all fixed annuities, but since it only came to 42% of total fixed sales I added on Allianz to the fixed mix to bring the proxy nearer to 50% of total fixed annuity sales. Percentage of 2011 Annuity Sales By State 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% Alaska Arkansas Delaware DC Hawaii Idaho Illinois Iowa Kansas Kentucky Maine Massachusetts Mississippi Variable Montana Nebraska Nevada New Hampshire New Mexico North Carolina Fixed North Dakota Oklahoma Oregon Rhode Island South Dakota Texas Vermont Washington West Wyoming Using these representations, we see that percentage of total sales that a particular state represents is usually similar whether those sales are variable or fixed accounts for 7.9% of variable and 8.1% of fixed annuity sales. However, some states show a dramatic difference. accounts for 3.5% of fixed sales, but only 1.9% of variable. Texas represents 7.4% of fixed sales, but 5.5% of variable. Changing the emphasis, is 5.5% of national variable sales, but 3.8% of fixed. sells 2.2% variable and 0.8% fixed. And the greatest difference, accounts for 5.3% of variable, but only 0.5% of total fixed annuity sales. If my variable and fixed carrier proxies are representative, why are there these big differences? It makes intuitive sense that has low fixed annuity sales; the Byzantine insurance department regulations deter most carriers from filing fixed products there so all that are left for New Yorkers to buy are variable annuities. But why does have such a low percentage of fixed sales and why does have a much higher percentage of fixed sales than variable ones? I do not have an answer.

14 NAFA 14 Marrion Annuity Market Buying Power Factor - Age 45+ Texas Pennsylvani Illinois NC Massachuse SC Washington Kentucky Iowa Kansas Oklahoma Mississippi Nevada Arkansas Oregon Hawaii NH Nebraska WV Idaho New Mexico Maine Rhode Island SD ND Montana Delaware DC Wyoming Vermont Alaska Fixed Variable The annuity market buying power factor looks at size of the market as well as actual annuities purchased on a per capita basis. Whether the annuity offered is variable or fixed the same general patterns hold, excepting the states already mentioned. The change that per capita sales seems to affect is Massachusetts where variable annuities appear to be much more attractive than fixed annuities. However, one needs to remember that these results are based on only 66% of variable sales and 50% of fixed annuity sales. A more comprehensive carrier list of fixed and variable state-by-state sales is needed.

15 NAFA 15 Marrion Summary This introduces the annuity market buying power factor. It offers a new way of looking at the annuity sales potential of a given state by going beyond the potential market shown by prime age annuity prospects and actual sales. It produces a single number that can be used to compare the annuity power of one state versus another and may allow marketing dollars to be spent more effectively. The annuity market buying power factor has a very strong theoretical base if one is looking at overall annuity markets, but less so for narrower markets. The assumption is made that the annuity buyers of a given state act similarly in the size of their annuity purchase whether they are age 50 or age 70, but there is no evidence to support this (or disprove it for that matter). Future studies should reflect annuity sales by age in each state. In addition, a more comprehensive segmented breakdown of fixed and variable annuity sales is needed. Although the power factors for fixed and variable sales seem to generally hold true for most states, the deviations between carriers and groups of carriers indicates that a higher percentage of carriers needs to be included in the analysis. Methodology annuity market buying power factor The chart for Annuity Market Buying Power Factor Age 45+ shows with a factor of How do we get there? In 2011 there were 124,174,484 Americans age 45 or older. This works out to a state average of 2,250,000 per state (this number is adjusted to reflect the distortion that s very large population has on the other states). In 2011 had 8,543,277 residents age 45 or older. This means has people age 45 or older compared to the average state (8,543,277/2,250,000) In 2011 there were $229,005,442,864 of variable and fixed annuities purchased. On a per capital basis this works out to $1,816 of annuities purchased by each age 45 plus American. In 2011 had 8,543,277 residents age 45 or older. That year resident bought $18,186,021,965 of annuities. On a per capita basis that is $2,129. When compared to the national average it means the average Floridian bought or 117% of the national average ($2,129/$1,816). To determine s Annuity Market Buying Power Factor we multiply the number representing how the population compares with the nation (3.797) by the number reflecting the how the per capita sale compares with the nation (1.172). The result is Jack Marrion Advantage Compendium, Ltd.