Despite a difficult interest rate environment, income annuity sales grew almost 18% in the fourth quarter and nearly 7% in 2011, according to a new report.
Beacon Research, Evanston, Ill., published this finding in a new edition of its Fixed Annuity Premium Study. The quarterly survey tracks and analyzes product-level fixed annuity sales on an ongoing basis.
Beacon reports that the growth rates gave income annuities a record-high 13% of fourth quarter’s sales. Indexed annuity results claimed a 48% share of the quarter’s sales—also a record high.
“Income annuities did remarkably well, considering that lower interest rates and a flatter yield curve reduced payouts,” says Beacon Research CEO Jeremy Alexander. “Similarly, guaranteed lifetime income benefits helped sustain indexed annuity sales despite lower cap or participation rates.”
Total annual fixed annuity sales were resilient during the difficult conditions of 2011, falling just 1.1% to $75.6 billion, the survey says. Income annuity results advanced 6.6% to $8.5 billion.