All of the uncertainty surrounding the U.S. Department of Labor’s fiduciary rule hit sales of indexed annuities and annuities with multi-year rate guarantees hard in the first quarter, according to Wink’s Sales & Market report.
Indexed annuities accounted for about 56% of U.S. individual annuity sales outside of the variable annuity market during the quarter.
Sales of indexed annuities fell to $12.9 billion during the quarter, down 14% from the total for the first quarter of 2016, according to Wink.
Sales of multi-year guaranteed annuities fell about 17%, to $8.9 billion.
Sales of traditional fixed annuities fell 6.4%, to $1.1 billion.
Sales of all types of non-variable annuities fell 15%, to about $23 billion.
Sheryl J. Moore, president of Wink, said in a statement about her firm’s findings that insurance product distributors have been too busy to prepare for the DOL fiduciary rule to focus on marketing products.
“Sales show it,” Moore said.
The drop in non-variable annuity sales is occurring just as large numbers of baby boomers are entering their final years in the workforce and might want to insure their retirement income.
A recent Census Bureau report shows that about 4.4 million U.S. residents are on track to turn 55 this year, meaning that about 1.1 million turned 55 in the first quarter.
— Read Census Table Shows 37-Year-Olds Are Great Prospects on ThinkAdvisor.