Higher Rates Rocket Fixed Annuities to New Sales Growth Dimension
Volume for traditional fixed deferred products did something shocking.
Rising credit rates and a strong market led to stunning growth numbers for U.S. sales of individual fixed deferred annuities in the fourth quarter of 2022, according to new, preliminary issuer survey results from LIMRA.
Total sales of individual annuities soared 39% between the fourth quarter of 2021 and the latest quarter, to $87 billion.
Sales of variable annuities fell 30%, year over year, to $22.5 billion. But overall contract sales increased because fixed product sales climbed 110%, to $65 billion. That increase, in turn, was due largely to a 241% increase in sales of fixed deferred annuities, to $37.5 billion.
What It Means
Yes, clients are thinking more about annuities.
Details
LIMRA is a Windsor, Connecticut-based research organization that’s part of LL Global, a consortium owned by life insurers and other financial services companies.
Here’s how some types of products performed between the fourth quarter of 2021 and the fourth quarter of 2022:
- Fixed-rate deferred annuities: $37.5 billion (up 241%, from $11.0 billion)
- Fixed immediate annuities: $3.1 billion (up 94%, from $1.6 billion)
- Non-variable indexed annuities: $22 billion (up 32%, from $16.6 billion)
- Registered index-linked annuities: $9.9 billion (down 4%, from $10.3 billion)
- Traditional variable annuities: $13 billion (down 42%, from $21.7 billion)
The Future
Todd Giesing, a LIMRA annuity research executive, called the increase in fixed annuity sales “extraordinary.”
“Our forecast suggests that protection products will continue to boost growth in the annuity market for the next several years,” he said.
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