Data from Beacon Research and Morningstar, Inc. is in and Q3 2014 news on annuity sales is not all peaches and cream. Total annuity sales hit 56.9 billion, a five percent decline from the previous quarter and a one percent drop from the same period a year ago.

According to a report released by the Insured Retirement Insititute (IRI), “variable annuity sales were flat in the third quarter of 2014, coming in at $35.2 billion. This was a 1.1 percent decrease from $35.6 billion in the second quarter of 2014, but a 0.4 percent increase from nearly $35.1 billion in the third quarter of 2013.”

For fixed annuity sales there was a classic case of huge increases finally leveling off. After rising to its highest levels in five years, FA sales plummetted 10.7 percent from the previous quarter and dipped 3.5 percent from Q3 2013.

“Ebbs and flows are normal in the course of an established and mature industry, and the numbers in the third quarter reflect that,” said Cathy Weatherford, IRI President and CEO. “At the same time, mature does not equate to stagnant. This is a market that continues to innovate. The emergence of deferred income annuities over the past few years is a perfect example. Barely a blip in sales a short time ago, sales have since grown to $1 billion in 2012, to $2.2 billion last year, and are on pace to post double-digit growth in 2014. We expect this type of ongoing innovation to contribute meaningfully to overall sales as time goes on.”  

 

Additional takeaways from the Beacon Research:

  • Indexed annuity sales reached nearly $11.7 billion during the third quarter of 2014, a 9.6 percent drop from $12.9 billion in the previous quarter but a 16 percent rise from sales of nearly $10.1 billion in the third quarter of 2013. 
  • Income annuity sales reached $3.11 billion during the third quarter of 2014, an 8.3 percent drop from $3.39 billion in the previous quarter, but a 10.5 percent increase from sales of nearly $2.82 billion in the third quarter of 2013. 
  • For the entire fixed annuity market, there were approximately $9.5 billion in qualified sales and $12.1 billion in non-qualified sales during the third quarter of 2014.

 

Additional takeaways from the Morningstar research:

  • Variable annuity net assets closed the third quarter at $1.9 trillion. 
  • As a result of redemption activity, variable annuity net sales were negative for the quarter, estimated to be -$2.5 billion.
  • Within the variable annuity market, there were $22.7 billion in qualified sales and $12.5 billion in non-qualified sales.