According to a recent survey conducted by Wink Inc., sales of indexed annuities and multi-year guaranteed annuity (MYGA) contracts were solid in the second quarter. On the other hand, figures show that traditional fixed annuity products are on the decline.
Wink, a Des Moines, Iowa-based firm, has only released preliminary summary statistics for the U.S. deferred individual annuity market for the latest quarter, according to a recent article from ThinkAdvisor. But those numbers reveal that indexed annuity sales were up 18% when compared to the second quarter of 2017, with MYGA sales up 27%. On the contrary, sales of traditional fixed annuities dropped 12%, Wink says. Overall annuity sales increased 20%.
The latest Wink data is based on annuity sales reports on a survey of issuers of U.S. deferred individual annuities. These preliminary numbers include data from issuers accounting for approximately 97% of non-variable annuity sales. They do not include sales results for variable or immediate annuities, however.
A MYGA contract has a fixed rate that is guaranteed for more than a year, while a traditional fixed annuity offers a one-year guaranteed fixed crediting rate.
Last year, Wink reported that of the $23.5 billion in total U.S. deferred individual non-variable annuity sales, indexed annuities accounted for $14.6 billion of the sales, MYGA contracts made up $7.8 billion, and traditional fixed annuities accounted for $1 billion. Therefore, calculations suggest that in the last quarter, individual non-variable annuity sales may have increased to around $28 billion. The data also suggests that the share of sales coming from traditional fixed annuities may have dropped to around 3%, compared with 5% in the previous year.
The author of Wink’s Sales & Market Report, Sheryl Moore, said in a statement about the latest data that she believes that recent increases in interest rates and a new regulatory climate will only help sales momentum for the remainder of the year.
“I would say that the annuity industry is ready to get back to business,” Moore said.
Written by Rachel Summit