Fixed Annuities Near Record Sales

Indexed, income annuities up in second quarter

Allianz was the top seller of fixed annuities in the second quarter with $1.4 billion. (Photo: AP) Allianz was the top seller of fixed annuities in the second quarter with $1.4 billion. (Photo: AP)

Indexed annuity sales increased 8.3% from the first quarter to the second, Beacon Research reported on Sept. 6. Income annuities also increased, rising 6.1%. According to Beacon, this is the second-best quarter ever for both products.

Total fixed annuity sales rose 1% in the second quarter, but were down more than 17% from the same period a year ago.

“Both indexed annuities with GLWBs and lifetime payout immediate/deferred income annuities provide much-needed guaranteed retirement income,” Jeremy Alexander, CEO of Beacon Research, said in a statement. “Carriers also may have emphasized sales of both product types over fixed-rate annuities because their profitability was somewhat less affected by second quarter’s record-low interest rates.”

There were few changes in the top fixed annuity issuers in the second quarter. Allianz remained the top seller with $1.4 billion. New York Life moved up one spot with $1.2 billion, while trading places with Aviva, which sold $1.1 billion in fixed annuities. American Equity and Great American remained in fourth and fifth place, with $917 million and $876 million, respectively.

“Indexed and income annuities should continue to do well,” Alexander said. “But much will depend on the interest rate environment and the collective decisions by carriers to expand or pull back on sales.”

A report released at the end of August by LIMRA found similar increase in indexed annuities, reporting a 6% increase in the product. That report found annuity sales overall, including variable annuities, increased 4% from the first to the second quarter. 

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