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Life Health > Life Insurance

Indexed annuity activity down in Q4, up from 2011

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Total fourth quarter indexed annuity sales were $8.4 billion, down three percent from the previous quarter but up two percent when compared to the same period last year.

The results, found in’s Fourth Quarter, 2012 Indexed Sales Results released on Monday, March 18, were buoyed by the fact that annuity sales in 2012 set their fifth consecutive record. (AnnuitySpecs) a third-party market research firm specializing in indexed annuity and indexed life tools and an arm of Moore Market Intelligence, examined 44 indexed annuity carriers for the 62 edition of their “Indexed Sales and Market Report.”  

The report, which represents 99 percent of indexed annuity production found Allianz Life to once again be the number one carrier in the indexed annuity marketplace, capturing 14 percent of the total market share. Security Benefit Life, advanced from last year to reach the second position. American Equity, Aviva, and Jackson National Life rounded out the top five respectively.

For the second consecutive quarter, Security Benefit Life’s Total Value Annuity was the top selling indexed annuity.

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.”


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