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Variable Annuities Break Records in 1Q

The finalized first quarter annuity sales have just been released by the Insured Retirement Institute (IRI), as researched by Morningstar and Beacon Research firms.  According to Insurance News Net’s “Variable Annuity Net Assets Reach All-Time High,” variable annuity assets are now $1.61 trillion.  That is the highest they have ever been and an increase of 7.2% from the $1.50 trillion in the fourth quarter of 2011.  Variable annuity sales in the first quarter were down 2.6%, despite the all-time high in their assets.  The sales were $36.2 billion compared to the fourth quarter sales $37.2 billion.

Sales of fixed annuities went from $17.3 billion to $16.9 billion quarter to quarter, a decline of 2.2%.  Even so, income annuities actually increased 23% year to year and indexed annuities increased 9% year to year.  Market Value Adjusted annuities went up 1.6% quarter to quarter.  The consumer demand for guaranteed retirement income has definitely helped the income and fixed indexed annuities have a sales increase.  MVA annuities saw a quarterly increase because adjustments allowed the annuity carriers to credit a higher interest rate.

Overall annuity sales in the first quarter were down 2.5% from the fourth quarter of 2011.  They went from $54.5 billion to $53.1 billion.  IRI President and CEO Cathy Weatherford believes that the annuity market is still strong and is poised for growth.  She attributes the declines to normal market swings and says that the strong presence in the fixed annuity market of indexed and income annuities hints at more future growth.  The record high amount of variable annuity assets also points towards an increasing consumer interest in insured retirement products like annuities.

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