Sales of non-variable annuities continue to rise as recently reported in the latest Wink’s Sales & Market Report. According to an article from InsuranceNewsNet, in the third quarter of 2018, sales jumped 4.72% from the prior quarter and a whopping 46.26% when compared to the same period in 2017. Indexed, traditional fixed and MYGA annuity products were included in the report.
Third quarter report highlights include:
- Indexed annuity sales increased more than 2% when compared to the previous quarter and by more than 38% over the same period last year. Indexed annuities have a floor of no less than zero percent and limited excess interest that is determined by the performance of an external index, like the Standard and Poor’s 500.
- Traditional fixed annuity sales increased by 16.7% compared to the second quarter and by 28.7% over the same period last year. Traditional fixed annuities have a fixed rate that is guaranteed for one year only.
- Multi-year guaranteed annuity (MYGA) sales increased by 8.10 percent over the prior quarter and were up 63.4% over the same period last year. MYGAs have a fixed rate that is guaranteed for more than one year.
“American have had it with record-low rates on Certificates of Deposit (CD) accounts,” said Sheryl J. Moore, author of Wink’s Sales & Market Report. “Recent increases in annuity rates, coupled with incentives being offered by product manufacturers have really translated to sales momentum,” she added.
Additionally, structured annuity sales are estimated to have increased by nearly 40% from the previous quarter. Structured annuities have a limited negative floor and limited excess interest that is determined by the performance of an external index or subaccounts.
“The important thing to remember is that these aren’t indexed annuities, although some companies are marketing them in that manner,” Moore stated.
Written by Rachel Summit