Propelled by an improved interest rate environment, second-quarter fixed annuity sales posted sequential gains for the first time in two years.
According to a recent study conducted by Beacon Research, rising interest rates coupled with the steepest yield curve in close to two years afforded carriers the opportunity to increase the rates they offered on fixed and indexed annuities.
The study, “Fixed Annuity Premium Study” found total fixed annuity results were $17.1 billion in the second quarter, up 14.6 percent sequentially and 0.2 percent from last year. Sales of indexed annuities came in at $9.1 billion, up 17.1 percent from the previous quarter. Income annuity sales results, a category that includes the annuity du jour — deferred income annuities — grew 16.9 percent sequentially to $2.6 billion. Sales of market-value-adjusted (MVA) annuities were up 34.9 percent from the previous quarter to $1.3 billion.
New York Life was the top-selling fixed annuity company in Q2 with $1.47 billion while Security Benefit Life, a Guggenheim Partners Company, came in second with $1.43 billion. Allianz Life rounded out the top three with $1.26 billion.
Security Benefit Life was the top-seller of fixed rate non-MVA annuities, jumping from sixth place in the Q1. Symetra moved from third place to become the leader in back channel sales while Pacific Life took the lead among independent broker/dealers, up from second place in Q1. The other top companies in sales by product type and distribution channel remained unchanged from Q1.
New York Life had the top-selling annuity product in Q2 with its NYL Lifetime Income Annuity (Income) while Security Benefit came in second with its Total Value Annuity (Indexed). Security Benefit also came in third with its Secure Income Annuity (Indexed).
“We expect a modest increase in total fixed annuity sales in coming months should the interest rates continue to rise. DIAs probably will continue the strong growth pattern we’ve seen in the past 18 months,” Jeremy Alexander, CEO of Beacon Research said in statement.