Indexed annuity activity down in Q4, up from 2011

Sheryl J. Moore, president and CEO of Moore Market Intelligence said, "When you consider that record-low indexed annuity caps and rates have persisted, it's hard to ignore that these sales records provide compelling evidence of consumers' demand for retirement accumulation products with principal protection features. If such low interest rates persist, I project that indexed annuity sales will exceed fixed annuity sales by 2015."

Guaranteed Lifetime Withdrawal Benefit (GLWB) elections gained ground in the fourth quarter as data pointed to trends in rider elections and income commencement.

In regard to indexed life sales, which the report also tracked, the 48 carriers that participated — which comprise 99 percent of production — had cumulative fourth quarter sales of $430.8 million, an increase of almost 34 percent when compared to the third quarter. Sales were also up 34 percent when compared to the same period of 2011. 2012 was the third consecutive record-setting year for indexed life sales.

"The interesting part of all this is that while indexed life sales account for more than one-out-of-four fixed universal life sales today, the number will only continue to increase," Moore said. "Companies have already made product and pricing changes as a result of the steeper thresholds for AG 38′s reserving requirements; numerous carriers have communicated that they will continue making similar changes."