Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor
A rocket rises into space

Life Health > Annuities

Multi-Year Guaranteed Annuity Sales Get Back on the Rocket

By Allison Bell

X
Your article was successfully shared with the contacts you provided.

U.S. life insurers refilled their tanks of multi-year guaranteed annuity capital in the fourth quarter of 2023.

Life insurers let sales of the products rocket up to $53 billion in the quarter, up 48% from the total recorded in the fourth quarter of 2022, after increasing just 13% in the third quarter of 2023, according to a new issuer survey compiled by Wink.

MYGA sales growth was especially strong in 2022, thanks to rising interest rates. Complaints about the amount of capital needed to support the products began to bubble up in 2023.

Wink survey participants said their total fourth-quarter individual deferred annuity sales increased 33%, year over year, to $105 billion.

LIMRA, which conducts a separate survey that includes a wider range of products, says the issuers in its sample increased total U.S. individual annuity sales by 29%, to $115 billion.

What it means: Clients are still putting money in annuities, even though crediting rates have come down a bit.

Wink’s numbers: Here are the Wink survey results by product type, reflecting changes between the fourth quarter of 2022 and the fourth quarter of 2023:

  • MYGA contracts: $53 billion (Up 48%)
  • Registered index-linked annuities (RILAs): $12 billion (Up 33%)
  • Non-variable Indexed annuities: $28 billion (Up 29%)
  • Traditional fixed annuities: $731 million (Up 27%)
  • Traditional variable annuities: $12 billion (Down 3.7%)

LIMRA’s numbers: Sales of products in LIMRA’s fixed-rate deferred category, which includes MYGAs, climbed 52%.

Changes in the tax rules helped increase sales of what has been a niche product, the deferred income annuity, grow even faster.

Here’s what LIMRA found:

  • Deferred income annuities: $1.3 billion (Up 81%)
  • Fixed-rate deferred annuities: $59 billion (Up 52%)
  • RILAs: $13 billion (Up 29%)
  • Non-variable indexed annuities: $25 billion (Up 10%)
  • Fixed immediate annuities: $3.5 billion (Up 9%)
  • Structured settlements: $2.1 billion (Up 5%)
  • Variable annuities (other than indexed): $12 billion (Down 3%)

Credit: NASA

Allison Bell

Think_Allison

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.