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U.S. Individual Annuity Sales Power Higher

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What You Need to Know

  • RILA contract sales were more than twice as high as in the first quarter of 2020.
  • Sales of traditional variable annuity climbed 37%.
  • Someone forgot to tell issuers that annuities with benefits guarantees are supposed to be dead: Fixed-rate annuity sales increased, too.

Easing of the COVID-19 pandemic and rising interest rates helped push U.S. individual annuity sales toward the sky in the second quarter.

Sales climbed to $68 billion, up 39% from the total for the second quarter of 2020, according to the Secure Retirement Institute’s latest issuer survey data.

Sales of individual fixed annuities increased 27%, to $35 billion, and sales of individual variable annuities leaped 55%, to $33 billion.

The COVID-19 pandemic, and pandemic-related financial turmoil, chilled annuity sales in the second quarter of 2020. Issuers and financial services professionals have been struggling to get sales back on track ever since.

Sales rose 2% in the fourth quarter of 2020 and 9% in the first quarter of this year.

Here’s how sales of five types of annuities changed between the second quarter of 2020 and the latest quarter:

  • Traditional Variable Annuities: $23 billion (up from $17 billion)
  • Fixed-Rate Deferred Annuities: $16 billion (up from $13 billion)
  • Non-Variable Indexed Annuities: $15 billion (up from $12 billion)
  • RILA Contracts: $10 billion (up from $4.5 billion)
  • Fixed Immediate: $1.8 billion (up from $1.4 billion)

(Image: Adobe Stock)