It’s a silver lining to an otherwise dismal quarter.
Sales of deferred income annuities reached a record high in first quarter 2013, according to the Beacon Research Fixed Annuity Premium Study. This is the fifth consecutive quarter in which they increased, climbing 150% higher than a year ago. The success of DIAs helped overall income annuity sales grow 1.4% year over year.
“Deferred income annuities were a bright spot in a difficult quarter,” said Jeremy Alexander, CEO of Beacon Research, said in a statement. “Ongoing product development and increasing sales underscore the importance of generating guaranteed retirement income for consumers and their advisors.”
But the industry continued to be impacted by the ongoing low interest rate environment, according to Alexander. Total fixed annuity results were $15 billion in the first quarter, down 11.7% from a year ago and 7.7% sequentially.
However, fixed rate MVA sales dipped only slightly from the prior quarter, suggesting that consumers are willing to accept some potential interest rate risk in exchange for higher credited rates. Indexed annuity sales decreased 7.9% quarter on quarter to $7.8 billion, and fixed rate non-market-value-adjusted (MVA) annuities fell 8.1% sequentially to $4 billion. Income annuities dropped 8.2%.
Allianz was once again the top fixed annuity company in the quarter, followed by Security Benefit Life, New York Life, American Equity and Jackson National.