Last year was the first time ever that all types of fixed annuities had year-over-year annuity sales increases. Records were shattered all around, which was surprising to some as interest rates remained low. In the article “Fixed Annuities Continue Strong Sales Pace in 2013, Best Year Since 2009,” Beacon Research’s Lisa Plotnick summarized the research firm’s Fixed Annuity Premium Study. Income and indexed annuities blew old sales records out of the water with their sales results in 2013. The total fixed annuity sales were up for three quarters in a row for the first time since 2009. Deferred income annuity sales crossed the $3 billion mark for the first time. Fixed annuity sales increased 16.6% last year, to a total of $78.1 billion. That’s the highest total since 2009. In the 4th quarter, fixed annuity sales were up 4.7% from the third quarter and up 45.2% from the previous year.
Indexed annuity sales were up 17% from the third to the fourth quarter. The sales of $11.8 billion made for both quarterly and year-to-date records. Income annuity sales of $3.5 billion, including immediate and deferred, broke both of the same records. DIA sales increased 27% from the third to the fourth quarter and they now account for 1/5 of all income annuity sales. The Beacon Research study includes a chart comparing the different types of fixed annuities and their sales last year. The top three sellers of fixed annuities last year were New York Life, Allianz Life and Security Benefit. Those three companies accounted for 23.5% of fixed annuity sales in 2013. In the fourth quarter, the top five fixed annuity sellers were Allianz Life, Security Benefit, New York Life, Great American and American Equity.
Allianz Life sold the most indexed annuities in the fourth quarter and the full year. New York Life sold the most income annuities, including SPIAs and DIAs. Western National sold the most fixed-rate Non-MVAs in the fourth quarter and the full year. They also sold the most fixed-rate MVAs in the fourth quarter. But New York Life sold the most in that category over the full year. The article also lists the sales leaders by channel for 2013. The top selling fixed annuity in the fourth quarter went to Allianz Life’s Allianz 360 indexed annuity. The rest of the top 5 list in the fourth quarter were Security Benefit Life’s Total Value Indexed Annuity, New York Life’s NYL Lifetime Income Annuity, Pacific Life’s Pacific Index Choice and American Equity’s Bonus Gold indexed annuity.
Indexed annuities held four out of the top five spots in total fixed annuity sales for 2013. They also held six out of the top ten spots for the year. Beacon Research predicts that fixed annuity sales will continue increasing during the first half of 2014, albeit modestly. The guarantees offered by all types of fixed annuities are keeping them increasingly popular as Americans search for a way to guarantee lifetime income.
Written by Rachel Summit