Whew, annuities have taken a beating lately. According to the latest report from LIMRA, total annuity sales fell for the fourth consecutive quarter (when compared to the same quarter a year earlier.) In the first quarter of 2010, total annuity sales dropped to $51.4 billion, off 24 percent from the first quarter 2009.

Joe Montminy, assistant vice president for LIMRA’s annuity research said, “Despite steady variable annuity sales over the last year, shrinking interest rate spreads have undermined fixed annuity sales–causing total annuity sales to hit an eight-year low this quarter.”

Say it ain’t so, Joe!

In light of the bad news, there’s a silver lining, right?

You betcha–as long as you take more of a big-picture, long-term view, that is.

The Insured Retirement Institute has released a survey that says “the overall outlook for the annuity industry is positive, as retirement income and principal protection continue to rate highly among industry executives and advisors. While some challenges remain, respondents indicated the growth industry’s opportunities are strong.”

Insured Retirement Institute President and CEO Cathy Weatherford says: “With the increased spotlight placed on the exclusive retirement income security provided by annuities, it’s no surprise positive expansion is coming… While insurers work to further develop simplified offerings, both broker/dealers and advisors consider living benefits to be a key factor in selecting a product.”

Other findings from the survey
Nearly two-thirds of insurers surveyed indicated that they either offer simplified annuities or plan to do so in the coming 12-18 months.

There has been an increase in the consideration of annuities for wealth transfer purposes, particularly to provide retirement income to heirs, while also providing a degree of spendthrift protection.