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Annuity inflows dipped 6% in 2012

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Inflows for all annuity types processed in 2012 declined by $5.6 billion or 6 percent, according to a new report.

The Depository Trust & Clearing Corporation (DTCC) Insurance & Retirement Services (I&RS) reported this finding on Wednesday in a summary of results on activity in the market for annuity products from its Analytic Reporting for Annuities online information service. The report is based on more than 48 million transactions, accounting for $158 billion in annuity cash flows, processed by I&RS.

The report shows that annuity inflows dipped to $84.7 billion in 2012 from $90.3 billion in 2011. Outflows increased to by $7.2 billion, or almost 11% in 2012, to $73.5 billion, from $66.3 billion in 2011.

The decline in inflows and the increase in out flows resulted in a decrease of net cash flows to $11.3 billion from $24 billion in 2011, the report states.

The survey adds that the number of transactions was up 7.5% from 2011 and total cash flows increased by 1%. The annuity transactions were processed for 112 insurance company participants, 116 broker/dealers  and for 3,418 annuity products

Among the report’s other findings:

Variable annuity inflows in 2012 increased to $63.8 billion, up 0.1 percent from the $63.8 in inflows recorded in 2011.

Fixed annuity inflows in 2012 declined to $7.5 billion from the $11.3 billion posted in 2011, a 33.4 percent decline.

Combined inflows of variable and fixed annuities in 2012 edged down to $4.3 billion from $6.6 billion in 2011, a 35.7 percent decline.

Inflows into fixed immediate annuities increased by 82.2 percent to $2.4 billion in 2011 from $1.3 billion in 2011.

Group annuity inflows fell to $4.6 billion in 2012 from $5.5 billion in 2011, a 15.6 percent decline.