Total annuity sales increased 8% in 2011 over 2010 to hit $240.3 billion as reported by LIMRA in its fourth quarter 2011 U.S. Individual Annuities Sales Survey.
According to LIMRA, Windsor Conn., the survey represents 94 percent of the market.
In the fourth quarter, total annuity sales dipped marginally to hit $54.7 billion. Fourth quarter variable annuity sales were flat when compared to the previous quarter; this after six consecutive quarters of positive growth. When compared to the previous quarter, variable annuity sales were down four percent to $38.4 billion.
Total fixed annuity sales fell two percent in the fourth quarter to reach $19.0 billion. 2011 saw fixed annuity sales drop one percent, to reach $81.0 billion. Due to the Federal Reserve’s policy of keeping interest rates low through 2014, LIMRA anticipates quarterly fixed annuity sales to remain between $18-22 billion in 2012.
Indexed annuity sales remained stable, up one percent in the fourth quarter when compared to the prior year. They hit $8.3 billion but were still down five percent from the previous quarter. Year-to-date, indexed annuities were flat when compared to 2010 hitting a total of $32.2 billion. Indexed annuity sales outperformed traditional fixed annuities (book-value and market-value adjusted), occupying 44 percent of the fixed annuity market.
Fixed immediate annuity sales were broke records with $8.1 billion in sales in 2011, up seven percent from 2010. Fourth quarter immediate annuity sales grew six percent compared to the prior year to reach $1.9 billion.
“The demographics of the US population cannot be ignored. There are currently more than 42 million retirees in the US and the number is expected to grow to 65 million by 2025. Many of these retirees need to establish a guaranteed income stream that immediate annuities can provide. We anticipate demand for this product will grow for many years to come,” said Joe Montminy, LIMRA assistant vice president, annuity research.
Book-value sales dropped five percent in the fourth quarter, to hit $6.3 billion. In 2011, book-value sales were $30.4 billion, the same as in 2010. Market-value sales fell 14 percent in the fourth quarter, to $1.3 billion. Total market-value sales dropped 15 percent to hit $5.2 million when compared to 2010.
US Individual Annuity Sales Top 20 Companies ( $ in thousands)
1. MetLife 30,985,581
2. Prundetial Annuities 21,325,490
3. Jackson National Life 19,755, 592
4. AIG Companies 16,555,625
5. TIAA-CREF 13, 441, 787
6. Lincoln Financial Group 12, 399, 741
7. Allianz Life of North America 10,340,541
8. Nationwide Financial 8,155,600
9. New York Life 8,126,718
10. AXA Equitable 7,170,707
11. RiverSource Life Insurance 6,977,114
12. AEGON USA 5,455,394
13. American Equity Investment Life 5,090,093
14. Pacific Life 4,983,283
15. AVIVA 4,542,058
16. Protective Life 3,381,625
17. Thrivent Financial for Lutherans 3,111,133
18. Sun Life Financial 3,038, 482
19 Great American 3,012,100
20 John Hancock 2,617,264