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Life Health > Annuities

Stock Gains Pushed Index-Linked Annuity and Life Sales Higher in Q1

By Allison Bell

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Strong stock market gains and stable interest rates helped increase sales of index-linked annuities and index-linked life insurance policies in the first quarter, according to new issuer survey data from LIMRA.

U.S. sales of individual registered index-linked annuities, or RILA contracts, which are regulated as variable annuities, increased 39% between the first quarter of 2023 and the latest quarter, to $14.5 billion.

Sales of individual fixed indexed annuities, which are regulated as fixed insurance products, rose 24%, to $29 billion.

LIMRA reported that the number of indexed universal life policies was up 13% in the first quarter. Annualized premiums from IUL policy sales increased 4%, to $930 million.

What it means: Attractive investment markets and aging clients’ rush toward retirement continue to pump up annuity sales.

The backdrop: The interest rates paid by bond issuers have started to level off, but Bryan Hodgens, head of LIMRA research, noted that rates are still significantly higher than they were a few years ago.

That’s helped insurers create the investments needed to improve market-sensitive products with benefits guarantees, such as fixed indexed annuities, he said.

“Sustained strong interest rates have allowed carriers to improve FIA crediting rates and raise cap rates, which increased the overall product line attractiveness,” Hodgens said.

Annuity sales details: Here’s what happened to LIMRA U.S. figures for new annuity sales between the first quarter of 2023 and the latest quarter.

  • Deferred income annuities: $1.2 billion (Up 40%)
  • RILAs: $15 billion (Up 39%)
  • Fixed indexed annuities: $29 billion (Up 24%)
  • Variable annuities (other than indexed): $14 billion (Up 7%)
  • Fixed immediate annuities: $3.6 billion (Up 6%)
  • TOTAL: $107 billion (Up 13%)

Life sales details: Here’s what happened to LIMRA figures for new individual life sales between the first quarter of 2023 and the latest quarter.

  • Traditional universal life: $250 million (Up 9%)
  • Indexed universal life:  $930 million (Up 4%)
  • Variable universal life: $427 million (Up 4%)
  • Term life: $724 million (Up 2%)
  • Whole life: $1.4 billion (Down 8%)
  • TOTAL: $3.8 billion (Down 1%)

Correction: An earlier version of this article described LIMRA’s public quarterly life survey reports incorrectly. LIMRA now provides the dollar value of quarterly individual life insurance sales.  

Lucky photographe/Shutterstock

Allison Bell

Think_Allison

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