Sales of variable indexed annuities were hot in the second quarter, and sales of non-variable products were not.
U.S. sales of all types of individual deferred annuities fell to $46 billion in the latest quarter, down 21% from the total for the second quarter of 2019, according to new issuer survey data from Wink Inc.
Sales of the non-variable annuities Wink tracks fell about 22%, to $26 billion, and sales of variable annuities fell about 20%, to $20 billion.
Sales of products that Wink classifies as “structured annuities” — contracts that protect a holder against a specified level of loss of account value due to the performance of an investment index, rather than automatically protecting all account value against losses resulting from the performance of an investment index — moved against the wind.
Insurers register structured annuities with the U.S. Securities and Exchange Commission as variable insurance products.
Sales of variable indexed annuities rose 9.4% between the second quarter of 2019 and the latest quarter, to $4.5 billion.
Sales of variable indexed annuities may have outperformed sales of other types of annuities partly because insurers see them as less risky to issue than annuities that protect all account value against investment index drops.
- A copy of Wink’s latest survey summary is available here.
- An article about the Wink numbers for the previous quarter is available here.
- An article about structured annuities is available here.
The Secure Retirement Institute came up with similar results when it conducted its own first-quarter annuity issuer survey.
Sheryl Moore, president of Wink, said in a comment included in an announcement of the results that everyone watching the annuity market knew overall sales would be down.
“As everyone continues adjusting to COVID-friendly selling, and the 10-year Treasury remains minuscule, sales are going to continue to be challenged,” Moore said.
The second quarter ended June 30.
Here’s a look at how sales of the types of annuities Wink tracks changed between the second quarter of 2019 and the latest quarter:
- Structured annuities: 4.5 billion (up 9.4%)
- Multi-year guaranteed annuity (MYGA) contracts: $13 billion (down 0.4%)
- Variable annuities, other than structured annuities: $16 billion (down 26%)
- Indexed annuities filed as non-variable contracts: $13 billion (down 35%)
- Traditional fixed annuities: $426 million (down 51%)
Wink now has data from 13 structured annuity issuers, 51 variable annuity issuers, 61 fixed annuity issuers, 67 indexed annuity issuers, and 82 MYGA issuers.
For the preliminary first quarter report, Wink collected has from 12 structured annuity issuers, 47 variable annuity issuers, 48 fixed annuity issuers, 61 indexed annuity issuers, and 68 MYGA issuers.
— Read Non-Variable Annuity Sales Still Look Good: Survey Manager, on ThinkAdvisor.