U.S. Q3 Individual Annuity Sales Rise 12%
One question is what inflation fears will do to sales in the fourth quarter.
Sales of U.S. individual annuities continued to increase in the third quarter, in spite of the effects of a major surge in COVID-19 cases.
Total sales rose 12% between the third quarter of 2020 and the latest quarter, to $62 billion, according to the Secure Retirement Institute’s latest issuer survey data.
Sales of individual fixed annuities fell 0.9%, to $31.5 billion, and sales of individual variable annuities grew 29%, to about $31 billion.
Todd Giesing, head of annuity research at the Secure Retirement Institute, predicted in a comment on the results, included along with the new data release, that concerns about inflation could help sales of non-variable indexed annuities, by leading investors to seek products that combine principal protection along with a higher level of investment growth.
Some insurers now sell registered index-linked annuities — products registered with the SEC as securities, which can limit the amount of principal protection the issuer provides.
Some big insurers are entering the RILA market with new products, and that help expand the RILA market, Giesing said.
Details
Here’s how sales of five types of annuities changed between the third quarter of 2020 and the latest quarter:
- Traditional Variable Annuities: $22 billion (up from $18 billion)
- Non-Variable Indexed Annuities: $17 billion (up from $13 billion)
- Fixed-Rate Deferred Annuities: $11 billion (down from $16 billion)
- RILA Contracts: $9.2 billion (up from $6.3 billion)
- Fixed Immediate: $1.5 billion (up from $1.4 billion)
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