CommInsure has made a number of improvements to its annuities offering in response to a growing demand from retirees for retirement income products.
The Commonwealth Bank’s insurance arm has updated its product disclosure statement and reduced the new minimum investment amount for CommInsure annuities to $10,000 from $20,000.
“We’re enhancing our service offering and educating advisers and investors about the benefits that annuities can provide, particularly for those seeking regular income streams in retirement,” CommInsure head of annuities George Lytas said.
“We see significant opportunities for Australia’s annuities market, particularly as retirees are living longer and demand for guaranteed retirement income products is growing,” he said.
Mr Lytas added that he believes the annuities market in Australia, which compared to other counties is quite low, will grow as awareness builds about the benefits annuities can provide in addressing the longevity risk in retirement
“The 2015 Intergenerational Report showed that a retiree at age 70 today can expect to live for another 17 years for a male and another 19 years for a female,” he said.
“Many people don’t account for the fact that their retirement savings need to potentially last to age 90 or beyond.
“Allocated pensions perform well for many retirees; however, as they live longer, their allocated pension balance may not last the distance,” Mr Lytas said.
Mr Lytas also highlighted that annuities can act as an “ideal form of insurance in retirement”.
“[They can guarantee] that no matter how your other investments have performed, or how quickly you have used up your retirement savings, you still have a guaranteed income to support you,” Mr Lytas said.
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