With gas prices rising and the economy grinding down, it’s no surprise that indexed annuity sales were down as well during the first quarter.
According to the latest Advantage Index Sales & Market Report, the sale of indexed annuities during the quarter — including those registered as securities –hit $5.7 billon. That number was off 10 percent from fourth quarter sales. However, sales are up over half a percent over the same time frame a year ago.
“This was a tumultuous quarter. All indicators were on track for sales to be up — caps, participation rates and spreads have been favorable over the past quarter; and CD rates have been down as well,” according to Sheryl Moore, CEO of AnnuitySpecs.com, who conducted the study.
Those results are “great indicators that sales should have rebounded for the beginning of the year. However, sales were down considerably for a number of the top carriers, and this was felt by the market as a whole,” added Moore.
For the indexed life market, total first quarter sales were $122.9 million, a reduction of more than 24 percent from the previous quarter. Compared to first quarter 2007 results the numbers were up 17.6 percent.
“Coming off of the fourth quarter is always tough, but I’ve also seen some carriers stop taking equity harvesting business as well as other special interest cases that favor Indexed Life,” says Moore. “I believe that once these newer carriers get their distribution thoroughly trained, sales will be fully-recovered.”