What You Need to Know
- Sales of traditional fixed-rate annuities fell sharply, according to preliminary results of a Secure Retirement Institute issuer survey.
- Sales of products with rates that change climbed more than 10%.
- Individual annuity issuers have pulled back from selling fixed-rate annuities and benefit guarantee riders in recent years, citing low interest rates.
The Federal Reserve Board appears to be ready to start raising the interest rate benchmarks it controls, but low rates continued to reshape the U.S. individual annuity market in the fourth quarter of 2021.
Sales of traditional fixed-rate annuities fell sharply, according to preliminary results of a Secure Retirement Institute issuer survey.
Sales of products with rates that change — traditional variable annuities, non-variable indexed annuities and, especially, registered index-linked annuities, or RILAs — climbed more than 10%.
Overall sales increased to $63 billion, up 8% from the total recorded for the fourth quarter of 2020.
Sales for all of 2021 increased 16%, to $255 billion.
Life insurers have benefited from easy year-over-year sales comparisons through most of 2021 because social distancing efforts related to the COVID-19 pandemic hurt 2020 sales.