U.S. sales of individual non-variable annuities continued to look great in the second quarter, according to sales survey managers at Wink Inc. and the LIMRA Secure Retirement Institute.
Interest rates have started to fall, after rising gradually for several years. Todd Giesing, annuity research director at the LIMRA institute, said lower rates could hurt the numbers in future sales reports.
“There is usually a lag between in interest rates drops and sales declines,” Giesing said in a statement. “We anticipate sales to substantially drop in the third and fourth quarters.”
But the LIMRA institute found that U.S. sales of the individual non-variable annuities it tracks increased to $38 billion in the second quarter, up 12% from the sales figure it recorded for the second quarter of 2018.
(Related: Non-Variable Annuity Sales Continue to Climb)
Wink, which conducts a separate survey, found that sales of the U.S. individual, deferred, non-variable annuities it tracks increased 16% between the second quarter of 2018 and the latest quarter.
Wink did not publish a dollar value for second-quarter non-variable annuity sales in the new report, which is based on preliminary data.
The LIMRA institute picture looks different from the Wink picture partly because the LIMRA institute includes figures for immediate annuities and structured settlements in its results.
The LIMRA institute says overall variable annuity sales held stead at about $26 billion.
Sales of deferred variable annuities with results that are not tied to investment indexes fell 7%, to $22 billion.
Sales of indexed deferred variable annuities, which the LIMRA institute calls registered index-linked annuities, increased 66%, to $4.1 billion.
Why Falling Interest Rates Could Affect Future Results
Insurers assume that earnings on their investments will help them handle obligations to annuity holders and other customers with arrangements that are designed to stay in place for many years.