Data released Thursday by Beacon Research found fixed annuity sales were finally turning around. In the first quarter of 2011, fixed annuities posted their first period-to-period increase in two years with a 6% increase to almost $19 billion.
Overall sales improved 7% from the fourth quarter of 2010, but indexed and income annuities were down 15% and 7%, respectively. Book value sales rose 42% and MVAs increased 7%.
“Fixed rate annuities benefitted from higher rates in first quarter,” Jeremy Alexander, CEO of Beacon Research, said in a press release. “They had a strong rate advantage over CDs in many banks. The steep yield curve made longer term rates particularly attractive and sales moved longer as a result."
Book value annuities and market value-adjusted products showed the greatest increases at 12% and 7%, respectively. Income annuities and indexed annuities each increased less than 1%.