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Filed Under:Annuities, Fixed Indexed

FIAs sole annuity category to enjoy sales growth in 2012

Sales of fixed indexed annuities edged up 5 percent in 2012, the only annuity category to enjoy positive revenue growth in 2012, according to a new report.

LIMRA, Windsor, Conn., discloses this finding in a report that reveals fourth quarter and year-to-date annuity sales for 2012. The data is based on sales reported by 57 companies representing 95 percent of total sales.

Sales of fixed indexed annuities in the fourth quarter totaled $8.5 billion, up two percent over the $8.3 billion recorded in the fourth quarter of 2011. For all of 2012, indexed annuities totaled $33.9 billion, up five percent from the $32.2 posted in 2011.

Other fixed annuities suffered moderate to steep sales declines in 2012. Chief among them: book value annuities, which fell 21 percent in the fourth quarter ($4.9 billion versus $6.2 billion for the year-ago period) and 29 percent for all of 2012 (21.2 billion versus $29.9 billion in 2011.)

Sales of fixed rate deferred annuities also plummeted in the fourth quarter to $5.9 billion from $7.4 billion, a 20 percent dip. Sales for all of 2012 totaled $25.7 billion, down 27 percent from the $35.1 billion posted in 2011.

Also recording double-digit declines were market value-adjusted annuities, which fell 17 percent in the fourth quarter ($1 billion versus $1.2 in 2011) and 13 percent for all of 2012 ($4.5 billion versus $5.2 billion); and fixed deferred annuities, which edged down 8 percent in the fourth quarter ($14.4 billion vs. $15.7 billion) and 11 percent in 2012 ($59.6 billion vs. $67.3 billion).

Sales of all fixed annuities in the fourth quarter totaled $17.6 billion, down 7 percent from the $18.9 billion recorded in 2012. For the year, fixed annuities fell to $72 billion from $80.5 billion, an 11 percent decline.

Turning to variable annuities, the LIMRA report shows that sales (including fixed accounts and separate accounts) dipped in the fourth quarter to $35 billion from $38 billion, an 8 percent decline. For all of 2012, VA sales edged down 7 percent to $147.4 billion from $157.9 billion in 2011.

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