Annuity sales are taking a beating in the third quarter. Another report, this time rom the Bank Insurance & Securities Research Associates (BISRA), which tracks annuity premiums sold through banks, charted a 12-year low in annuity sales.
In total, annuity sales fell 7 percent in Q3 to $7.5 billion. Coming in at $4.5 billion, variable annuities were off 6 percent from the second quarter and 13 percent below the third quarter of 2011. Of the top 10 variable annuity (VA) carriers, only three reported gains in Q3, BISRA reported in its quarterly annuity sales survey.
That contrasts with mutual funds, which saw sales inch up 1 percent to a five-year high last quarter. BISRA pointed out that many VA carriers continue to remake products in an effort to deal with the low interest rate environment by cutting investment selections and reducing living benefit features. Those moves, in turn, make “VA products less attractive to consumers wanting to take advantage of an up market,” the BISRA report stated.
But VAs were not the only annuity product line that slumped in the third quarter. Fixed annuity sales tumbled to $3 billion, the lowest sales tally since the first quarter of 1999. Compared to a year ago, Q3 sales decreased 25 percent. When measured against the first nine of last year, fixed annuity premium was down 33 percent.
Janet Cappelletti, head of research at BISRA, noted in a statement that simultaneous “significant” declines in VA and fixed annuity sales is rare.