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IRI Finds 15% Drop in Q3 Annuity Sales

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The Insured Retirement Institute says it’s seeing the same slump in U.S. individual annuity sales that two other insurance industry organizations have detected.

Revenue from new U.S. sales of individual annuities fell to $44 billion in the third quarter, down 15% from the total for the third quarter of 2016, according to IRI.

The Washington-based group gets its non-variable annuity data from Beacon Research and its variable annuity data from Morningstar.

  • Sales of non-variable annuities of all kinds fell 12.5%, to $23 billion.

  • Sales of variable annuities fell 17.5%, to $25 billion.

  • Sales of indexed annuities, which are included in the non-variable total, fell 9.5%, to less than $14 billion.

Sales of every type of annuity contract included in the new IRI report were down, year over year.

(Related: Q2 Annuity Sales Look Better: IRI)

A copy of the IRI report is available here.

LIMRA recently reported, based on insurer survey data, that it believes third-quarter individual annuity sales revenue fell about 13%, year over year.

Wink estimated, based on its own insurer survey, that non-variable annuity sales were down 11%.

Cathy Weatherford, IRI’s president, said in a statement that lingering uncertainty about the U.S. Department of Labor’s fiduciary rule hurt annuity sales in the third quarter.

Jeremy Alexander, the chief executive officer of Beacon Research, said his firm sees distribution channels for non-variable annuities continuing to broaden.

Once regulators clear up the fiduciary rule uncertainty, and insurers and distributors adapt to any changes, “we expect to see a strong recovery in sales volume,” Alexander said.

—Read Individual Annuity Sales Softened in Q3: Wink on ThinkAdvisor.

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