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August 24, 2023 at 02:23 PM
What You Need to Know
- Total annuity sales increased to $80 billion.
- MYGA sales were higher than in the second quarter of 2022 but lower than in the first quarter of this year.
- Non-variable indexed annuity sales were up versus both the previous quarter and the year-earlier quarter.
U.S. retail annuity sales continue to grow, but sales of one type of product that has been especially popular — the multi-year guaranteed annuity contract — are cooling.
Total individual annuity sales increased to $80 billion in the second quarter, up 9.6% from total for the second quarter of 2022, according to new annuity issuer sales survey data from Wink.
Overall growth was down from 42% in the first quarter, partly because the rate of growth for MYGA sales dropped to 16%, from 173%. MYGA sales dropped 24% between the first quarter and the second quarter, to $30 billion.
Some insurance company executives have expressed concerns about MYGA market rationality.
Sales of non-variable indexed annuities, which offer lower guaranteed rates but the potential for holders to earn higher rates, increased, both when compared the first quarter of this year and the second quarter of 2022.
Sheryl Moore, the CEO of Wink, contends that MYGA sales are still remarkably strong but said in an email interview that insurers’ views about pricing could be affecting the market. “I definitely believe there are some loss-leader products being marketed right now,” she said. “Competition is fierce.”
What It Means
Clients may be warming up to the idea of accepting more risk in exchange for the chance to earn higher rates.
Many life insurers, meanwhile, seem to want to avoid competing head-to-head with the insurers offering your clients the best MYGA deals.
Details
Wink based the second-quarter annuity sales figures on data from 124 annuity issuers.
