Q2 sales of indexed annuities marked their second-best quarter ever, advancing 8.3% from the first quarter and grabbing 50% of market share in the fixed annuity space. According to Beacon Research, indexed annuity sales rose to $8.8 billion from $8.2 billion in Q1 and were up 4.8% from the $8.4 billion of indexed annuities sold in the second quarter of last year. Year-to-date sales were up 6.7% as well, climbing from $15.9 billion to $17 billion.
Income annuities also showed quarter-over-quarter growth, rising 6.1% to $2.3 billion. First-half sales were up 10.1%, increasing from $4 billion in the first six months of 2011 to $4.4 billion at the end of June, reports Beacon.
Yet those rises in indexed and income annuity sales could not overcome an overall slump in fixed annuities purchases. Although total fixed annuity sales were up 1% between the first quarter and the second quarter ($16.9 billion to $17.1 billion), the product category slipped 17.2% from the second quarter of last year (when sales were tallied at $20.7 billion) and 13.2% year to date ($39.2 billion versus $34 billion), according to Beacon Research.
In the fixed annuity space, there were roughly $8.7 billion in qualified sales and $8.4 billion in non-qualified sales in Q2.
Meanwhile, using statistics from both Beacon and Morningstar, the Insured Retirement Institute (IRI) reports that industry-wide annuity sales in the U.S. reached $55.3 billion, a jump of 4.1% from the first quarter when sales came in at $53.1 billion.
Variable annuities still account for the lion’s share of annuity sales. VA sales were up 5.4% quarter-over-quarter, stretching to nearly $38.2 billion from $36.2 billion in Q1. However, year-over-year, total variable annuity sales declined 4.5% from just under $40 billion in Q1 2011, reports Morningstar.
Net VA sales also gained during the quarter, rising 5.7% to more than 4 billion from $3.8 billion in Q1.
VA net assets fell 3.2% to $1.56 trillion from a record level of $1.61 trillion in Q1, reports Morningstar. Net VA assets were down just 0.6% from the second quarter of last year when the total was calculated at $1.57 trillion. Qualified sales of VAs hit $25.8 billion in Q2, followed by non-qualified sales of $12.4 billion.