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July 26, 2023 at 02:52 PM
What You Need to Know
- Sales of both variable and non-variable products increased.
- Secure 2.0 may have helped sales of immediate and deferred income annuities.
- Sales of traditional variable annuities struggled.
Life insurers are continuing to sell more annuity products with fixed benefit guarantees — in spite of their efforts to limit their exposure to annuity guarantee risk.
Total sales of U.S. individual annuities increased 12% between the second quarter of 2022 and the second quarter of this year, to $88.6 billion, according to new LIMRA data.
Sales of annuities with fixed guarantees, including non-variable indexed annuities, climbed 29%, to $31.7 billion.
Provisions in the Setting Every Community Up for Retirement Enhancement 2.0 Act, or Secure 2.0, that promote use of income annuities may have combined with higher interest rates to boost sales both of immediate income annuities and deferred income annuities. Sales of traditional variable annuities, which offer returns tied to the performance of investment funds, fell.
Todd Giesing, an assistant vice president with the LIMRA Annuity Research unit, predicted that individual annuity sales will continue to be strong for the rest of the year. “Economic conditions continue to be favorable,” he said.
What It Means
Clients are continuing to seek products that can provide an insured stream of income.
