LIMRA recently released their annuity sales totals for 2014. LifeHealthPro’s Daniel Williams summarized the highlights of LIMRA’s Fourth Quarter 2014 U.S. Annuity Sales Survey in the article “Total U.S. annuity sales improve three percent in 2014.” A 3% increase in total annuity sales is certainly a good thing for the annuity industry. Increasing sales were led by indexed annuities and income annuity products. More Americans than ever before are placing a high value on creating a predictable income stream in retirement, so the guaranteed income offered by annuity products is becoming increasingly desirable. Interest rates decreased by close to 1% last year, but annuity sales didn’t see the decline that could’ve come with lower interest rates. Interest rates were trending upwards at the end of 2013, which makes the annuity sales increase last year during an interest rate decline even more powerful.
Great performances from indexed and income annuity products helped propel the total annuity sales for 2014 to $235.8 billion. Even though deferred income annuities don’t make up a large percentage of total annuity sales, these products have seen record breaking sales over the past year. Their sales of $2.7 billion were a 22% increase from 2013’s DIA sales. Total annuity sales actually decreased 6% in the 4th quarter of last year when compared with the 4th quarter of 2013. Immediate income annuity sales were $9.7 billion last year, which was a 17% increase from 2013. Last year was the first time that fixed indexed annuity sales made up more than 50% of the total fixed annuity market share. Indexed annuity sales of $48.2 billion were 23% higher than their sales in 2013. Total fixed annuity sales increased 13% last year, to $95.7 billion. Fixed-rate deferred annuity sales, like MVAs and book value annuities, increased 1% over the course of the year to $29.7 billion. Variable annuity sales, however, saw their lowest total since 2009. The $140.1 billion of variable annuities sold in 2014 were a 4% decrease from 2013. This number isn’t very large though considering the number of insurance companies who stopped selling variable annuity products. Total annuity sales remain strong, although the products dominating are undergoing a shift.