It’s a Small World

Insurance companies or insurance “carriers” are the organizations that actually produce or manufacture annuities.

Similar to many other financial services businesses, the annuity industry is highly concentrated in terms of the product manufacturers.  In other words, a couple dozen insurance companies produce almost all annuity sales in the United States, and of these companies, the top five companies account for roughly half of all annuity sales.

Creating and distributing annuities requires large amounts of capital, economies of scale, a strong balance sheet and a solid reputation.  These requirements create high hurdles for newer, smaller companies that wish to compete.