Some Clients Said 'No Thanks' to Traditional Variable Annuities in Q3
Fear of market volatility pushed up sales of multi-year guaranteed annuities.
Stock market volatility hurt sales of traditional variable annuities in the third quarter but helped sales of non-variable annuities, according to new annuity issuer sales survey data from Wink.
Sheryl Moore, the CEO of Wink, said rising interest rates made multi-year guaranteed annuities, or MYGA contracts, especially popular.
“This isn’t surprising, considering that I have three-year MYGAs today that are crediting nearly three times the interest that they were in the first quarter,” Moore said.
What It Means
Many clients who say they can handle volatility can’t.
Performance by Product
Wink based the third-quarter annuity sales figures on data from 18 index-linked variable annuity issuers, 48 variable annuity issuers, 51 traditional fixed annuity issuers, 68 non-variable indexed annuity issuers, and 83 multi-year guaranteed-annuities (MYGA) issuers
Here’s how the sales of the types of annuities that Wink tracks changed between the third quarter of 2021 and the latest quarter:
- Multi-year guaranteed annuity contracts: $27.4 billion (+138%)
- Non-variable indexed annuities: $21 .0billion (+21.0%)
- Registered index-linked annuities: $10.2 billion (+11.9%)
- Traditional fixed annuities: $451.6 million (+25.2%)
- Traditional variable annuities: $13.4 billion (-37.9%)
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