Insurance News Net’s article “Indexed Annuities Post Record 3Q Sales” summarizes annuity sales information collected from LIMRA’s annuity research department. With indexed annuity sales of $8.7 billion, this safe investment product is seeing quite the surge in popularity. The third quarter sales were an increase over last year’s third quarter of 16%, and an increase of 6% over the second quarter of this year. A LIMRA spokesperson credits the increased demand for indexed annuity products to a volatile equities market and lower fixed annuity rates. He says that indexed annuities now account for 41% of the entire fixed annuity market. Some conservative investors are opting for the indexed annuity now over the traditional fixed annuity they may have bought a few years ago.
Annuity sales overall increased by 1% from last years’ third quarter, but went down 2% from the second quarter of this year to total $56.1 billion. Variable annuity sales followed the same trend with a 2% decrease from the second quarter, but a 9% increase in sales from the third quarter of 2009 to equal $34.9 billion. Fixed annuity sales have decreased 31% this year to date, but that is following a record sales year in 2009. Their third quarter sales decreased 1% from last quarter and 10% from the third quarter of 2009 to $21.2 billion. Overall, annuity sales have remained steady this year, even with a still volatile marketplace. As investors looking for lower risk opt more for indexed annuity products, the insurance companies selling annuities will shift their focus a bit as well.