Overall annuity sales results declined in first quarter 2010, the Insured Retirement Institute (IRI) announced, based on its new annuity reporting system that combines variable annuity data from Morningstar, Inc. and fixed annuity data from Beacon Research.
Annuity sales for the first quarter were $47.4 billion, down 6.9% from $50.9 billion in the previous quarter. Year-to-year quarterly sales of annuities were down 27%, declining from $64.4 billion in the first quarter of 2009.
Fixed annuity sales for the first quarter were $16 billion, down 14.7% from $19 billion in the previous quarter. Year-to-year quarterly sales of fixed annuities were down 51.9%, declining from $34 billion in the first quarter of 2009.
“The quarter-to-quarter drop in fixed annuity sales was due mainly to lower book value and MVA results. It appears that prospective buyers expected higher rates in the future and did not want to lock in first quarter’s credited rates,” said Jeremy Alexander, Beacon Research President and CEO. “A year ago, fixed annuity sales hit a record high because of the flight to safety and strong fixed annuity rate advantage. It’s not surprising that year-over-year results were down substantially.”
Variable annuity sales for the first quarter were $31.4 billion, down 1.5% from $31.9 billion in the previous quarter. Year-to-year quarterly sales of variable annuities were up marginally, posting a 3% increase from first quarter 2009 sales of $30.4 billion. First quarter 2009 net sales were $3.4 billion. There were $21.7 billion in qualified sales and $9.6 billion in non-qualified in the first quarter.