Fixed indexed annuity sales rise 14% to $20 billion in second quarter

Limra Secure Retirement Institute data finds VA sales stopped declining

Aug 21, 2019 @ 11:07 am

By InvestmentNews

Fixed indexed annuity sales totaled $20 billion in the second quarter, 14% higher than prior year results, according to data compiled by the Limra Secure Retirement Institute.

[More:Indexed annuity sales projected to grow nearly 40% by 2023]

"The second quarter's FIA sales total represents the highest quarterly sales for FIAs ever," said Todd Giesing, the organization's annuity research director. "Despite declining interest rates, we are forecasting the current momentum of FIA sales to continue through the end of the year and expect sales of FIAs to exceed $70 billion for 2019."

In the first six months of 2019, FIA sales were $38 billion, an increase of 18%, compared with the first six months of 2018.

Fee-based FIA sales were $193 million in the second quarter. While this marks major growth for this market (188% over prior year), fee-based FIAs hold less than 1% of the total FIA market.

Total annuity sales were $63.9 billion in the second quarter, up 7% compared with the prior year results. This is the highest quarterly sales recorded since the first quarter 2009, and the third consecutive quarter where total annuity sales surpassed $60 billion.

Year to date, total annuity sales were $124.8 billion, an increase 11%, compared with results from the first half of 2018.

Limra said that fixed annuities represented 60% of the total annuity market in the second quarter, and that their sales have outperformed the sales of variable annuities in 12 of the last 14 quarters.

[More:Fixed annuity sales smash previous record]

After two consecutive quarters of declines, VA sales were $25.8 billion in the second quarter, level with second quarter 2018 results.

Limra SRI is forecasting total VA sales to be under $100 billion for 2019.

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