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DTCC Releases March and 1Q Annuity Product Activity

By Bill Coffin

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The Depository Trust & Clearing Corporation (DTCC) Insurance & Retirement Services (I&RS) released today March and first quarter information on activity in the market for annuity products from its Analytic Reporting for Annuities online information service, which leverages data from the transactions that DTCC processes for the industry. Analytic Reporting for Annuities is a service offering of National Securities Clearing Corporation, a DTCC subsidiary.

DTCC noted among its chief findings that annuity inflows processed by DTCC in March increased by almost 10%, to $7.7 billion from $7 billion in February. Out flows processed in March increased by almost 12% to $6.4 billion from $5.7 billion in February. Net flows were almost unchanged in March, increasing one half of one percent from just under $1.3 billion to just over $1.3 billion.

Inflows and net flows have increased in each of the first three months of 2012, breaking a declining trend in 2011.

Inflows and net flows were down in the first quarter of 2012 compared to the first quarter of 2011. Out flows increased.

The increasing divergence of inflows between qualified accounts and non-qualified accounts continued in March. Inflows into qualified account types were slightly under 61% while inflows into non-qualified account types were slightly above 39%.

Although non-qualified accounts attracted 39% of inflows in March, net cash flows into non-qualified accounts were negative for the third month in a row, meaning that in each of the last three months more funds were withdrawn than added. The following chart shows monthly net cash flows in non-qualified accounts from January 2011 to March of 2012.

In August 2011, DTCC partnered with the Retirement Income Industry Association (RIIA) to analyze cash flows across six RIIA-defined broker/dealer distribution channels and product categories. The percentages of inflows processed by DTCC I&RS in January across those six channels broke down as follows:

  • 29% – Independent broker/dealers
  • 16% – Wirehouses
  • 15% – Regional broker/dealers
  • 14% – Bank broker/dealers
  • 9% – Insurance broker/dealers
  • 18% – Others

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