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Retirement Planning > Retirement Investing > Annuity Investing

Industry-wide annuity sales up 13 percent year over year

By Lynette Gil

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Industry-wide annuity sales are up 13.1 percent year over year with sales during the first quarter reaching $56.1 billion. When compared with the first quarter of 2013, sales totaled $49.6 billion, according to data reported by Beacon Research and Morningstar, Inc. published in a press release by the Insured Retirement Institute (IRI).

“Combined annuity sales across the marketplace are well above the pace set in 2013,” said Cathy Weatherford, IRI President and CEO. “This surge was supported by continued strong sales of fixed annuity products. Sales of all types of fixed annuities soared well above first-quarter 2013 levels, achieving year-over year sales growth ranging, depending on the product, from 38 percent to nearly 155 percent.” 

IRI reported that year-over-year sales growth was supported by continued high levels of fixed annuity sales, which totaled $22.6 billion during the first quarter and represent a 50.7 percent increase from nearly $15 billion in the first-quarter of 2013. However, sales are down just 4.1 percent from $23.5 billion in the previous quarter.

Meanwhile, variable annuity total sales came in at $33.5 billion in the first quarter, down 3.2 percent compared with first-quarter 2013 total sales of $34.6 billion, and down 6.4 percent from $35.8 billion during the fourth quarter of 2013, according to the IRI report.

Furthermore, strong fixed annuity sales during the first quarter were sustained by the second highest quarterly sales of indexed annuities on record. Indexed annuity sales reached $11.2 billion during the quarter, a 44.3 percent increase from nearly $7.8 billion during first-quarter 2013, but a 4.4 percent decline from the record high of nearly $11.8 billion set during fourth-quarter 2013.

In addition, market value adjusted (MVA) annuity sales continued to grow, reaching $2.48 billion in the first quarter. This was a 26 percent increase compared to sales of $1.96 billion during the previous quarter and a 154.6 percent increase from MVA annuity sales of $972 million during the first-quarter of 2013. For the fixed annuity market, there were approximately $11.1 billion in qualified sales and $11.5 billion in non-qualified sales during first-quarter 2014, IRI reports.

And according to Morningstar, variable annuity net assets continue to reach new all-time highs, closing the first quarter at $1.88 trillion. Meanwhile, variable annuity net sales were negative for the first quarter, coming in at an estimated -$1.1 billion, which was a narrower loss in flows than the -$2.8 billion in fourth-quarter 2013. Within the variable annuity market, there were $22 billion in qualified sales and $11.5 billion in non-qualified sales, says the report.

To see the full press release, click here.

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