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I&RS: Monthly Annuity Inflows Averaged $7.5 Billion in 2011

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Monthly inflows into annuities processed by a unit of the Depository Trust & Clearing Corporation averaged $7.5 billion in 2011, according to a new report.

Insurance & Retirement Services, a wholly owned subsidiary of DTCC, published this finding in its 2011 Annuity Market Activity Report. I&RS’ Analytic Reporting for Annuities online information service analyzes data from millions of annuity transactions that DTCC processes for the insurance industry.

In 2011 I&RS processed more than $156 billion in annuity transactions for 105 insurance company participants (representing 41 parent/holding companies), 133 broker-dealers and 3,150 annuity products.

The report discloses that monthly outflows from annuities in 2011 averaged $5.5 billion. And net cash flows averaged just under $2 billion per month.

The top 10 insurance parent/holding companies, the report adds, captured 79% of total inflows. The top 10 companies by market share include MetLife (17%), Jackson National (12%), Prudential/Pruco (11%), AIG Companies and Lincoln National (7% for each company), Riversource and Nationwide (6% each), John Hancock (5%), Transamerica/AEGON Companies (4%) and Allianz Life (3%).

The report reveals that 25 insurance parent/holding companies accounted for more than $42 billion positive net cash flows. Sixteen insurance parent/holding companies experienced negative net cash flows total over $18 billion.

Eighteen of the 42 insurance parent/holding companies groups, the report notes, had a retention ratio of more than 50%. Translation: There was $2 or more of inflows for every $1 of outflows.

The percentage of inflows going into qualified accounts increased to 61% in December from 58% in January. The percentage of inflows going into non-qualified accounts declined to 39% in December from 42% in January, the report says.

The retention rate of cash inflows in qualified accounts exceeded that of non-qualified accounts (42.46% versus 4.27%).

The report notes there were 99 distributors with more than $1 million in annuity inflows. Of those, eight distributors had between $1 billion and $2 billion in inflows.

Ten distributors had more than $2 billion in inflows. And the top 10 distributors accounted for 67% of all inflows, the report finds.