LIMRA announced Wednesday that variable annuity sales for the fourth quarter improved 17% over the same period one year ago to reach $38.5 billion. Sales grew 10% in 2010, totaling $140.5 billion for the year.
There are a couple of things happening to contribute to variable annuities' success, according to Joe Montminy, assistant vice president for LIMRA's annuity research. First, "as equities markets improve, consumers' appetite for annuities continues to grow," he told AdvisorOne. "During the financial crisis, advisors pulled back from annuities to wait for changes in the products to settle down." That started to happen around the end of 2009, according to Montminy.
"Finally, carriers are starting to make small changes to their products to make them more attractive. All of those things together led to growth in annuity sales."
Furthermore, the election rate for products with guaranteed lifetime benefit riders remains exceedingly high – in the fourth quarter the election rate was 87%, Montminy said.
At $57.6 billion, individual annuity sales rose 6% in the fourth quarter from the same period in 2009. Total annuity sales fell 7% for 2010, largely due to poor sales among fixed annuities.