Fixed Annuity Sales Up From First Quarter

According to Investment News’ article “NY Life tops 2Q list of fixed-annuities sellers” by Darla Mercado, fixed annuity sales increased from the first quarter of this year to the second quarter.  With sales of $19.4 billion in the second quarter, fixed annuity sales increased 18% from the first quarter but went down 30% from last year.  New York Life Insurance Co. sold $1.74 billion of fixed annuities to nab the top sales spot.  Allianz Life Insurance Co. of North America had the second largest fixed annuity sales of $1.68 billion.  With sales of $1.61 billion, Aviva USA had the third highest sales.  AIG’s subsidiary Western National Life had the fourth highest fixed annuity sales of $1.29 billion, while the fifth highest sales of $1.05 billion were from American Equity Investment Life Insurance Co.

Many believe that the widening spread between fixed annuity rates and Treasury rates is accounting for the increase in fixed annuity sales.  The wider spread also makes it more profitable for insurance companies to handle fixed annuity business.  While fixed annuities have been harder to sell recently, there has been quite an increased interest in fixed indexed annuity products because of their cap rates.  Variable annuities have also seen a sales increase, according to multiple reports.  The $34.4 billion of variable annuities sold this past quarter was an increase from $31.8 billion last year.  New variable annuities sold this quarter totaled $6.22 billion, up from $6.14 billion last quarter.  An increased interest in both variable and fixed annuity products means that investors are looking for secure ways to ensure that their income lasts for the remainder of their lifetime.

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