Total sales of annuity products reached $219 billion in 2012—the lowest level since 2005— according to LIMRA, which released its top 20 list of annuity sellers Thursday.
Variable annuity sales hit $147 billion, and fixed annuity sales weighed in at $73 billion, LIMRA reported.
“Unlike historical trends, VA sales (down 7% in 2012) did not follow equity market growth, which increased 13%” in 2012, Joseph Montminy, assistant vice president and director of LIMRA Annuity Research, told AdvisorOne. “VA sales performance in 2012 was clearly influenced by companies’ strategic management of their books of business—removing some products from the market, limiting additional contributions into existing contracts and revising features/pricing on GLB riders.”
The record indexed annuity sales of $33.9 billion in 2012, Montminy added, ”could not overcome the sharp decline in traditional fixed-rate products sales (MVA and book-value), causing an overall decline in fixed annuity sales (down 11% in 2012).
“As a result, total annuity sales fell 8% in 2012 to reach $219.4 billion.”
Cathy Weatherford, president of the Insured Retirement Institute, said recently that innovations and new offerings in deferred income annuities (DIAs), a form of fixed annuity, would become “the fastest growing product in 2013” on a percentage basis. A DIA, sometimes referred to as longevity insurance, allows the owner to defer the start of the guaranteed income stream.
IRI also reported that within the variable annuity market, while living benefit elections during the past few years have reached about 90%, many companies are aggressively developing new products without a living benefit to cater to consumers interested only in tax deferral or diversifying into different asset classes. This is expected to continue into 2013.
Here are the Top 20 companies in fixed and variable annuity sales in 2012, followed by the Top 20 in total annuity sales:
Top 20 Companies for FIXED Annuity Sales