Karen and Dennis Defnet of Wisconsin have three annuities that pay them several thousand dollars a month combined. AP Photo/Andy Manis

As variable annuity sales (VA) rise, so, too, are those of indexed annuities (IA). According to a third-quarter report from AnnuitySpecs.com, total IA sales hit $8.7 billion, up more than 5 percent from the previous quarter. Compared to the same period in 2010, sales decreased by less than 1 percent.

Sheryl J. Moore, president and CEO of Des Moines, Iowa-based AnnuitySpecs.com, noted that this was second highest quarter for IA sales and that indexed annuities now account for one out of every two fixed annuity sales.

She said that while VAs are on the rise because the stock market has started to recover, indexed annuities are also proving popular with the public.

“When the market first crashed in ‘08, VA sales dropped big time,” Moore said. “But now that the market is going up a little more, they are starting to go back up. We typically see sales of fixed annuities and indexed annuities going down in a time like that. However, fixed annuities sales have declined, while indexed have not. The main reason being that there are a lot of product innovations in this market right now that are providing guaranteed lifetime income that the purchaser cannot outlive without having to annuitize. That has become a strong value proposition for the products as well.”

Allianz Life held its position as the number one carrier in the IA field with a 17 percent market share. Next up was Aviva, with American Equity, Great American (GAFRI) and Lincoln National rounding out the top five. Allianz’s MasterDex X was the top IA seller for the tenth consecutive quarter.

In all, 41 IA carriers participated in the survey, representing 99 percent of IA production.

On the indexed life side, third-quarter sales came in at $251.1 million, up nearly 20 percent over the previous quarter and an increase of 51 percent from the same quarter in 2010.

Number one in market share was AXA Equitable (18 percent), trailed by Aviva, Pacific Life Cos., Aegon Cos., and National Western. For the second consecutive quarter, AXA Equitable’s Athena Indexed UL was the top selling indexed life insurance product. A total of 37 insurance carriers contributed to the indexed life report, accounting for nearly 100 percent of production.