Annuity sales rise in second quarter, still below 2012 levels

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Annuity sales increased slightly going into this year’s second quarter, but overall annuity sales were still down for the first half of 2013 when compared to the same period in 2012, according to life insurance research firm LIMRA.

According to LIMRA’s second quarter 2013 U.S. Individual Annuities Sales survey, total annuity sales reached $56.5 billion in 2013’s second quarter, which is 9% higher than the first quarter of the year. However, annuity sales for the first half of 2013 were down 4% over the same period in 2012, reaching only $108.2 billion compared to $112.3 billion last year.

Joe Montminy

Joe Montminy

The top three annuities sellers in the second quarter were, in order, Jackson National Life, with $11.7 billion; Lincoln Financial Group with $8.3 billion; and AIG Cos. with $7.2 billion.

“This quarter’s results are encouraging for the annuity industry — every product line improved from the first quarter of 2013,” said Joseph Montminy, assistant vice president, LIMRA Annuity Research. “Observing the economic improvements, including interest rate increases, we believe variable annuity sales have stabilized while fixed annuity sales will continue to improve for the remainder of the year.”

Variable annuity sales dipped 1% in the second quarter compared to the same time period in 2012, reaching $38.2 billion, but that is up 8% above the first quarter of this year. Year-to-date sales reached $73.7 billion, which was overall a 3% decline from 2012.

Deferred income annuities showed strong results, with sales reaching $535 million in the second quarter of 2013, a 155% increase over the same period in 2012. Year-to-date, deferred income annuities grew 151% to nearly $1 billion.

Fixed annuity sales grew to $18.3 billion in the second quarter, down 1% compared with the prior year. However, this is 13% higher than the first quarter of the year. In the first half of 2013, fixed annuities fell 6%, totaling $34.5 billion.

Quarterly indexed annuities reached $9 billion. Second quarter sales grew 5% compared to last year. Year to date, indexed annuities improved 1%, to reach $16.8 billion. Bank market share of indexed annuities was 12% in the second quarter.

Single premium immediate annuity (SPIA) sales were flat in the second quarter of 2013 compared to one year ago, reaching $1.9 billion. This is 12% greater than results in the first quarter of the year. In the first six months of 2013, SPIA sales totaled $3.6 billion, down 3% over 2012.

Fixed rate deferred annuity sales fell 15% in the second quarter to $5.5 billion. Year to date they are 20% lower than a year ago, totaling $10.7 billion.

Also down were book-value sales, which fell 19% in the second quarter compared with the prior year, reaching $4.3 billion.

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