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Second Quarter Annuity Figures Positive for Industry


The second quarter of 2012 offered the annuity industry some positive results and the ability to look forward to the future.  While most of the annuity figures are still down when compared to 2012, the different types of annuities had increases from the first to the second quarter of this year.  Analysts expect fixed annuities to continue on this upward slope and think that variable annuities will likely stay consistent, based on interest rate increases and an improving economic environment.  This information comes from Insurance News Net’s article “Quarterly IA Sales Hit Record $9B High.”  Indexed and deferred income annuities hit record high levels, something that we’ve seen as a continuing trend in the recent past.

LIMRA collected the annuity data in their U.S. Individual Annuities Sales survey.  They found that overall annuity sales increased 9% from the first quarter of this year to the second, for total sales of $56.5 billion.  Every annuity product had an increase between the two quarters of 2013.  Total sales of annuities went down 4% during the first half of this year, with a value of $108.2 billion.  Variable annuity sales increased 8% quarter to quarter and declined just 1% compared to the second quarter of 2012.  Sales of variable annuities were $38.2 billion in the second quarter and $73.7 billion for the whole year.  Despite an uproar of negativity about declining guaranteed lifetime benefits with variable annuities, 89% of the products still offer a GLB rider.  This rider was elected 82% of the time that variable annuities were purchased, a decrease of 2%.

Deferred income annuities, the popular product of the past year or so, passed the half billion dollar mark with sales of $535 million in the second quarter.  It is likely that sales will double from 2012 to 2013, as these second quarter results were 155% higher than the second quarter of 2012.  Fixed annuity sales increased to $18.3 billion, a 13% jump from the first to the second quarter of this year and only 1% lower than the second quarter last year.  Indexed annuity sales were more than $9 billion last quarter for the first time in history.   This was a 5% increase from last year’s figures and pushes the year to date total to $16.8 billion, a 1% increase.  Indexed annuity sales are still being driven by GLWB’s, as seen by the 76% election rate in the second quarter.

Single premium immediate annuities increased 12% quarter to quarter, to a sales level of $1.9 billion.  This was equal to the sales level from the second quarter of last year.  Fixed rate deferred annuity sales went down 15%, while book value products decreased 19% from the second quarter of last year to the second quarter of this year.  Market value adjusted annuities stayed the same year to year.  LIMRA has listed the top 20 annuity sellers in the largest categories as well as more details of their sales survey on their website.

Written by Rachel Summit

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