According to a recent report from LIMRA, lower interest rates continue to place a lag on fixed annuity sales. Going inside the numbers, total U.S. annuity sales reached $58.2 billion in the third quarter, falling 2% from prior year. But all the news was not bad. In the first nine months of 2014, total U.S. annuity sales increased 6%, compared with 2013, to reach $177.7 billion.
“Throughout the year, fixed annuities have been the primary driver of overall annuity growth,” said Todd Giesing, senior analyst, LIMRA Secure Retirement Institute Annuity Research. “The 50 basis-point drop in interest rates since the start of the year has dampened interest in fixed products, pulling down third-quarter sales.”
Highlights from the report:
* On the fixed annuity side, sales were $22.7 billion in the third quarter, down 5% versus the prior year. Year-to-date, fixed annuity sales reached $71.8 billion, a 21% increase from 2013.
* Deferred annuities fell 32% compared to the prior year. Fixed-rate deferred annuities reached $22.4 billion in the first nine months, an 8% increase compared to last year.
* Index annuity sales grew 15% in the third quarter, to $11.7 billion. YTD, indexed annuity sales grew 31%, totaling $36 billion.