Structured Annuity Sales Shine: Wink

“It will be interesting to see how low fixed interest rates, coupled with market volatility, will affect this immature product line, in terms of sales,” Sheryl Moore, Wink’s president, said in a comment on the latest survey results.

Here’s a look at how sales of some of the types of annuities Wink tracks changed between the fourth quarter of 2018 and the latest quarter:

• Traditional fixed annuities: Down 26%
• Indexed annuities filed as non-variable contracts: Down 11%
• Multi-year guaranteed annuity (MYGA) contracts: Down 28%

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Bond Yields and Annuities

Annuity issuers depend heavily on income from investments in bonds and other fixed-rate assets to support annuity obligations.

Interest rates were rising in early 2019, but 10-year Treasury rates fell like a rock in May, stabilized in October, then returned to falling like a rock last month.

Many issuers have responded to the recent rate volatility by suspending sales of some annuities and annuity features, and changing the prices of the products they are still selling. That means any drops in sales in later quarters could reflect issuers’ appetite for new annuity business as well as consumers’ appetite for income protection products.

— Read Non-Variable Annuity Sales Still Look Good: Survey Manager, on ThinkAdvisor.

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