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U.S. Individual Annuity Sales Drop Slows: LIMRA

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The U.S. market for individual annuities may really be starting to recover, according to new survey data from LIMRA.

Overall individual annuity sales fell to $54 billion in the first quarter, down 8% from the total for the second quarter of 2016. But the year-of-year decrease was much smaller than the 12% decline that hit issuers between the first quarter of 2016 and the first quarter of 2017.

(Related: Q1 Annuity Sales Fell 18%: IRI)

LIMRA figures show that year-over-year shrinkage in individual fixed annuity sales narrowed to 7% in the second quarter, from 15% in the first quarter.

In the variable annuity market, year-over-year shrinkage held steady at 8%, according to LIMRA.

Another organization, Wink, recently reported that it believes the year-over-year drop in sales of individual non-variable annuities slowed to 9.3% in the second quarter, from 14% in the first quarter.

Both LIMRA and Wink based their annuity sales figures on results from life insurance company surveys.

One factor helping to firm up the market may be Trump administration efforts to slow adoption of the U.S. Department of Labor fiduciary rule standards for retirement plan advisors.

The second quarter started April 1 and ended June 30. Life insurers feared the DOL would start enforcing the new standards June 9. In May, the department postponed enforcement of the standards.

Another factor shaping annuity sales could be the strength of the stock market.

Sales of indexed annuities and of variable annuity separate accounts performed better than the individual annuity market as a whole.

Sales of indexed annuities fell just 7%, year-over-year, and sales of variable annuity separate accounts fell 6%.

Sales of the fixed accounts inside variable annuities sank 14%.

LIMRA posted the second-quarter sales data here.

LIMRA also posted company-by-company sales data.

Issuers too small to show up on a list of the top 20 issuers accounted for 26% of second-quarter sales, up from 24% of the sales made in the second quarter of 2016.

— Read Indexed Universal Life Sales Rise 3.4%: Wink on ThinkAdvisor.


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