Index Annuity Sales Hit New Quarterly Record Of $3.3 Billion

The 3^rd quarter numbers reflect an estimated 99% of total index annuity sales, says Marrion. The survey covers the 33 index annuity insurers currently in the market, but results for two of the 33 insurers are estimated, he says.

The top seller in the 3^rd quarter was Allianz Life, which the report says produced over $981.6 million in index annuity sales and gave the company a 29.5% market share. In 2^nd place was Midland National Life, with $737.5 million. Third place went to American Equity, with nearly $407.7 million.

These same three companies held the same market positions in the 1^st and 2^nd quarters of 2002, says The Advantage Group report.

According to Marrion, the three sales leaders accounted for nearly 64% of market share in the 3^rd quarter.

Segmented by distribution channel, the 3^rd quarter sales were generated primarily by insurance agencies, accounting for 96.8% of the sales, says the report. By comparison, banks pulled in 1.6%, broker-dealers pulled in 0.5%, and career shops pulled in 1.1%. These percentages reflect sales from 80% of the responding companies.

The large majority (95%) of 3^rd quarter sales went into index annuities that key their credited interest rates to the Standard & Poors 500 index. But the report notes that 10 insurers in the market now offer bond or equity indices beyond the S&P 500.

All carriers indicating they offer fixed account options in their index annuities reported they had seen “significant increase” in the amount of premiums directed toward the fixed accounts in the 3^rd quarter, points out Marrion. On average, he says, “the percentage of premium allocated to the fixed options was roughly double that of a year ago.”

However, he says, “roughly half of the premium was still being placed in index choices.”

Reproduced from National Underwriter Life & Health/Financial Services Edition, December 30, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.