Annuity sales will top $360 billion by 2014, according to a new report.
Celent, a division of Oliver Wyman Inc., New York, published this finding in a report released today, “North American Annuities: 2012 Market Trends and Technology Considerations.”
The study estimates that indexed annuities and other new annuities unveiled in recent years will fuel the market’s expansion by a compounded annual growth rate (CAGR) of 4% — approximately equal the total life insurance industry’s projected growth rate — attaining $368 billion by 2014.
By 2014, Celent anticipates that annuities will account for about 52% of the total life/annuity/health market, a level “not markedly different from 2011 because long-term outlooks are for interest rates to remain low.”
The study notes that individual variable annuity sales in 2011 were their strongest since 2007 and reached $155.5 billion, or 12% growth over 2010. Individual fixed annuities saw nearly flat sales in 2011, falling 1.1% compared to 2010, or $75.6 billion.