Total annuity sales hit $61.9 billion in the fourth quarter of 2013 representing an increase of 17% — the largest quarterly percentage increase in 11 years, LIMRA’s Secure Retirement Institute said Thursday.
For full year 2013, annuity sales were $230.1 billion, a 5% increase over 2012. Fourth quarter sales of indexed annuities reached $11.9 billion — a new quarterly record and a jump of $1.7 billion from the prior quarter, LIMRA says.
Indexed annuity sales were up 16% in 2013 compared with 2012 and totaled $39.3 billion. Fixed annuity sales were $25.6 billion in the quarter, the highest they have been since the second quarter of 2009 and up 45% compared to last year. Total fixed annuities sales grew 17% in 2013, totaling $84.8 billion.
“There were several reasons indexed annuities has such a strong fourth quarter,” said Joe Montminy, assistant vice president, LIMRA SRI Annuity Research. “Improved interest rates make the product offerings more attractive and they have benefited from continued product innovation.”
Another reason, he said, is the “organic growth” in the banking and independent BD channels. “This growth was additive and not at the expense of the independent channel, which saw a 24% increase in the fourth quarter and makes up 71% of the market.”
As for variable annuity sales, LIMRA found that sales marked “positive growth” in the fourth quarter, up 4% to $36.3 billion. Following a trend for the past few years, VA sales are no longer tracking with the equities markets. Despite extraordinary 32% growth in the equities market in 2013, VA sales were down 1% at year-end compared with 2012 and totaled $145.3 billion.