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Fixed & Variable Annuity Sales Push Total Figures Slightly Upward

Last week, the LifeHealthPro Editors summarized the IRI’s second quarter annuity sales report and found that “Annuity sales (are) trending slightly up year over year.” The Insured Retirement Institute based their report on information from Beacon Research and Morningstar Inc. Second quarter total annuity sales were $55.9 billion, just a little bit under the first quarter sales of $56 billion. That is down 4.3% from the second quarter of 2015’s sales of $58.4 billion. Year to date annuity sales of $112 billion are actually a slight increase over year to date sales at this time in 2015. Sales have fluctuated between product types and different companies, but overall sales have not faltered. Lifetime income products are still leading the way in high demand, something that the IRI’s President and CEO expects to stay the same. Products with lifetime income options will lead the way in new product innovation and advisor strategies to help their clients.

Fixed annuity sales were down 1.9% from the first quarter to the second quarter. They went from $30 billion to $29.5 billion. But these second quarter fixed annuity sales were 29.1% higher than sales during the second quarter of last year and were the second highest quarterly figure in seven years. Indexed annuity sales of $15.1 billion just missed another quarterly record. They were 5.9% higher than in the first quarter and a whopping 28% above 2015 second quarter indexed annuity sales. Beacon Research said that fixed annuity sales are strong and pointed out that significant fixed indexed annuity sales are leading the way. Qualified fixed annuity sales were $17.1 billion during the second quarter and non-qualified fixed annuity sales were $12.4 billion. The independent broker-dealer channel’s increasing indexed annuity sales made up for lower sales in some of the other types of fixed annuity products. Total fixed annuity sales are 36.2% higher at this point in the year than they were last year at this time. Even though sales went down a small amount from the first to the second quarter, the year to date $59.5 billion in fixed annuity sales are up $15.8 billion from 2015.

Variable annuity sales were up 1.8% from the first to the second quarter. Those sales of $26.4 billion were a significant 25.8% drop from 2015’s second quarter sales. Variable annuity sales have been down from last year because of the DOL fiduciary rule that was pending during the first quarter then finalized during the second. But variable annuity assets increased a small .3% from the first quarter to the second quarter net assets of $1.88 trillion. During the second quarter, qualified variable annuity sales were $18.4 billion, while non-qualified sales were $8 billion. Morningstar noted that the slight increase in variable annuity sales and relatively flat variable annuity asset numbers reflect what is currently happening in the markets. While total annuity sales trended up, we’re all watching to see where fixed and variable annuity sales take us for the rest of 2016 with the current economic situation.

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