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Indexed Annuities Poised to Have a Good Year

Last year was a great year for indexed annuities.  If the rest of the year follows the trend set by the first quarter, 2015 will also be a good year for the indexed annuity industry.  LifeHealthPro’s Daniel Williams talked about what happened with indexed annuities in the first quarter in the article “Indexed annuity sales off to strong start in 2015.”

The total fixed indexed annuity sales during the first quarter were more than $1.3 billion.  This was a 5% decline from sales during the fourth quarter of last year, but was a 5% increase from sales during the first quarter of 2014.  First quarter indexed annuity sales are traditionally lower than they are the rest of the year.  2015’s first quarter sales were actually higher than any first quarter indexed annuity sales since these products were introduced.  This information came from Wink, Inc.

Allianz Life and American Equity Companies remained the top two sellers of indexed annuities.  Allianz Life held 20.3% of the market share during the first quarter.  The top five was rounded out with Security Benefit Life, Great American Insurance Group and Athene USA in the third, fourth and fifth spots.

For the second quarter in a row, fewer people are electing Guaranteed Lifetime Withdrawal Benefits (GLWBs).  Wink’s President and CEO Sheryl J. Moore says that was expected because the indexed annuity industry has been shifting from an income focus to an accumulation focus.  Newer hybrid indices are different from previous index choices and allow distributors to offer more ‘uncapped’ crediting methods.

When it comes to indexed life sales, Aegon was number one with 13.7% of the market share.  The other companies in the top five were Pacific Life, National Life Group, Minnesota Life and Nationwide.  There were $380.3 million in indexed life sales overall in the first quarter.  These sales were down 24% from the previous quarter, but were up 15% from the same quarter last year.  Indexed annuity and indexed life sales follow similar patterns when it comes to yearly sales by quarter.

Based on first quarter indexed annuity sales, the fixed indexed annuity market is poised to have a good year.  If you have any questions about indexed annuity products, their benefits or drawbacks, contact an expert at Annuity FYI.

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