Indexed annuity sales totaled $8.7 billion in the third quarter of 2010, setting a new record, according to LIMRA. The numbers were up 6% from the prior quarter and 16% over third quarter 2009.
“This is the ideal market for indexed annuity sales: lots of volatility in the equities markets coupled with low credited rates and declining interest rate spreads on traditional fixed-rate annuities. This has attracted some conservative consumers that might have purchased a traditional fixed-rate annuity,” said Joseph Montminy, assistant vice president for LIMRA’s annuity research.
Indexed annuities have now grown to represent 41% of the fixed annuity market, said Montminy.
Total individual annuity sales improved 1% during the third quarter as compared to the same period last year to reach $56.1 billion. This was a 2% decline from the second quarter of 2010. In the first nine months of 2010, total annuities hit $164.5 billion, a drop of 11%.