Annuity inflows processed by the Depository Trust & Clearing Corporation in September declined by 4.8 percent, according to a new report.
The DTCC’s Insurance & Retirement Services (I&RS) released this finding in a report on activity in the market for annuity products. Published in Analytic Reporting for Annuities, an online information service of National Securities Clearing Corp., a DTCC subsidiary, the report leverages data from the transactions that DTCC processes for the industry.
The report reveals that annuity inflows processed by the DTCC in September declined to $7.4 billion from $7.7 billion in August. Outflows declined more than 10 percent over the same period, to $5.7 billion from $6.3 billion.
Net inflows increased almost 20 percent in September, to $1.7 billion from $1.4 billion in August.
After several months of an increasing percentage of inflows going into qualified accounts, reaching a peak of over 61 percent in all inflows in December 2011, the trend has reversed: 58 percent of inflows went into qualified accounts and 42 percent into non-qualified accounts, the report reveals.
Net cash flows in January were negative by over $550 billion. Net flows into non-qualified accounts reached almost $465 million in September 2012.
Compared to the second quarter of 2012, inflows in the third quarter were down $4.4 billion and outflows were down $6.7 billion, resulting in an increase in net cash flows of 39 percent, or $2.2 billion.
Compared to the third quarter of 2011, inflows totaled $14.4 billion, down $5 billion or 29 percent. Outflows totaled $11.7 billion, down $4 billion or 37 percent.
Net cash flows totaled $5.7 billion, down $721 million or 13 percent.
The top 10 insurance parent/holding companies ranked by inflows captured almost $33 billion inflows or 77 percent of total inflows in the first of 2012, the report states.
Thirteen of the 42 insurance parent/holding company groups had a cash flow retention ratio of more than 50 percent, yielding $2 or more of inflows for every $1 of outflows.