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May 22, 2013 at 01:44 PM
Annuity sales took a steep tumble in the first quarter, according to LIMRA. Even indexed annuities, which have shown strength while other categories sagged, didn’t escape the slump.
When the numbers from 58 companies representing 94 percent of the market were tallied up for the first quarter, total sales reached $51.7 billion, a 6 percent drop from a year ago.
Breaking out by product type, variable annuities (VAs) charted a 4 percent decline in sales in Q1, sliding to a total of $35.5 billion, the sixth consecutive quarter of decreases on a year-over-year basis. However, LIMRA pointed out that that number was 1 percent higher than in the fourth quarter of 2012. Variable annuity living benefit election rates held steady at 84 percent.
An even steeper dive was recorded in the fixed annuity space, where total sales dipped to $16.2 billion in Q1, down 11 percent from a year ago and the eighth consecutive quarter of declines.
Following record high sales in 2011 and 2012, indexed annuities fell back to earth. The $7.8 billion sold in Q1 represented a 4 percent decline from the same quarter a year ago and the lowest amount in two years.
Meanwhile, election rates of guaranteed lifetime withdrawal benefit (GLWB) riders on indexed annuities remained strong, with 72 percent of consumers electing a GLWB rider when available. LIMRA estimates that 88 percent of indexed annuities products in the market offer GLWB riders.
