Kotecha: The market delivered a strong quarter to start the year, bringing in $107.4 billion in sales. Although this represents an 8% decline from the previous quarter, sales remained steady year-over-year, increasing 1% compared to the same period last year and continuing the industry's run of $100 billion-plus quarters.

Products that combined protection and upside potential saw the largest growth. Registered index-linked annuity (RILAs) sales rose 20% year over year to $21.2 billion and variable annuity (VA) sales increased 17% to $17.2 billion, according to LIMRA.

Demographics are also helping sustain demand. We are still in the Peak 65 wave, with more Americans turning 65 than at any other time in history. With a significant portion of this generation nearing retirement without a pension, annuities remain an important option for generating protected income.

Nationwide's results reflected these broader trends. Our first quarter 2026 annuity sales totaled $5.2 billion, which positioned us as a top 10 player in both the variable and fixed annuity markets, according to LIMRA. We believe our diversified portfolio, broad distribution, disciplined strategy and focus on extraordinary care continue to position us well in changing market conditions, ensuring we can meet evolving investor needs and deliver on our promises for the long term.

Kotecha: We expect conditions to remain favorable for annuities in 2026, however advisors should pay attention to the following trends:

• Inflation: Inflation will remain an important planning consideration as clients look for ways to preserve purchasing power. According to the Labor Department's most recent report, U.S. inflation jumped to 4.2% in May, the highest level in three years. In a volatile market, VAs and fixed indexed annuities (FIAs) are a great way to keep up with inflation over a longer period of time. Both can provide clients with a foundation that helps provide protected lifetime income, while the rest of their portfolio can be allocated to assets to help protect against inflation.
• Interest rates: Interest rates will also matter. Nationwide's Office of Economics believes the Fed will hold rates steady and does not expect another rate cut until late 2026. If rates do move lower, fixed annuity sales could feel pressure. Carriers with a diversified product lineup will be best positioned to meet varying client needs in that environment.
• Equity markets: Equity markets are likely to remain strong but volatile, fueling continued demand for VAs and RILAs. Advisors should look for carriers that prioritize differentiation and enhanced consumer value in these products. For example, Nationwide has increased rates in our Lifetime Income+ (L.inc+) Rider suite, available with our VAs for an additional fee, making them among the best available in the industry. We believe investors shouldn't have to choose between growth potential or income, which is why we offer VAs with strong investment lineups that provide access to full menus even when investors select an income rider.

Kotecha: Personalization will continue to be a key differentiator. Investors want solutions aligned to their specific goals, timelines and lifestyles. Flexible product features still matter, but their experience matters too. Advisors - and annuity providers - that offer personalized communications and individualized interactions will set themselves apart in today's crowded marketplace.

Technology can help make that possible. Data analytics and digital tools can streamline operations, improve responsiveness and create a smoother client experience. In fact, according to a recent survey from Nationwide, financial professionals who sell annuities are already using a variety of software and financial technology platforms in their practices, including financial planning software, customer relationship management (CRM) platforms and performance reporting software. As the industry moves toward faster, more standardized processes, advisors who embrace these tools will strengthen client engagement and work more efficiently.

Nationwide is also investing heavily in technology with that goal in mind. We're implementing a new policy administration system that will standardize experiences for our customers. We're also focusing on meeting partners' needs with technology-enabled solutions, delivering competitive products and solutions to the market faster and optimizing business tools and processes to make simplicity a priority and enable an efficient experience.

Kotecha: Financial professionals understand the value annuities can bring to retirement income planning, and many now see them as a way to build longer-lasting client relationships. According to a survey from Nationwide, 73% of financial professionals who sell annuities say they believe they help them retain clients. At the same time, advisors still face challenges, including client perceptions that annuities are too complex and external perspectives from TV, radio and podcast personalities who may dispute their value. However, annuity carriers are responding, offering enhanced educational resources and support that make annuities easier to understand and position in client conversations.

In addition, many carriers are focusing on simplifying the sales process itself by streamlining and accelerating the application-to-issue process, allowing advisors to move from recommendation to implementation more efficiently. They are also offering more collaborative case design support, where internal specialists partner directly with advisors on complex client scenarios to craft tailored solutions. Pre-sale tools are also becoming more sophisticated, allowing for quick analysis, better client conversations and easier sales.

Lastly, Nationwide and other carriers continue to advocate for policy changes that are good for both the industry and American savers. To that end, we believe the registered investment advisor (RIA) market has evolved and would benefit from a unique RIA insurance agent license, providing more choice and opportunities for consumers to get access to fee-based insurance products. A proposed investment advisor insurance license would provide RIAs with the ability to recommend insurance products - both annuity and life - without the need to hold registration with FINRA as a registered representative and an appointment with an insurance company. We think this is positive for both RIAs and consumers. By providing consumers more access to insurance products, they can better meet their financial planning needs, regardless of which type of financial professional - commission-based or fee-based - they choose to work with.