Indexed annuity sales in the first quarter of 2009 dropped by about 2% when compared with the previous quarter but were up by nearly 23% when compared to the same year earlier period, reports AnnuitySpecs.com, Pleasant Hill, Iowa.
The 1Q 2009 sales totaled $7.1 billion, as compared with nearly $7.3 billion in 4Q 2008 and $5.8 billion in the 1Q of 2008, according to the Advantage Index Product Sales & Market Report: 1st quarter 2009. The report covers 53 indexed annuity providers and one registered indexed annuity carrier, or 94% of the active indexed annuity companies.
The combined market share for the top 5 sellers was 68.7%. Aviva, Des Moines, Iowa, led with a 34% market share, followed by Allianz Life, Minneapolis, Minn.; American Equity, West Des Moines, Iowa; Lincoln National Life, Hartford, Conn., and Midland National Life, Des Moines, Iowa.
Lincoln took a “surprisingly aggressive hold,” moving up to 4th place from 10th, says Sheryl J. Moore, president and chief executive officer of the annuity tracking service and its affiliate, Advantage Group Associates, Inc. Jackson National Life moved up 3 slots, to 6th place.
Thirteen companies have exited the market since the 4Q 2008, says Moore.
Other highlights from 1Q 2009:
–Indexed annuity commissions received by agents averaged 7.6% of premium.
–The S&P 500 index currently represents over 50% of indexed annuity sales. “Rainbow” indexes (multiple indexes ranging from 1%-5%) represent 7% of sales, and the Nasdaq-100 index represents nearly 3% of sales.
–Qualified sales represent 45% of total 1Q sales.
–Sales of index annuities with 10-year surrender charges increased to 59% from 45% the year earlier. Those with surrender charges of 6 years and under increased to almost 8% from nearly 7% the year earlier.
–Sales of products having surrender charges greater than 10 years declined from the year earlier as did sales of 2-tier index annuities.
–The average indexed annuity issue age was 62 years.
–The average indexed annuity sales premium was $56,113, up by about 4% from the previous quarter. By comparison, the average fixed annuity premium reported was $60,369, an increase of about 3% from previous quarter.