Annuities fell in 1Q; indexed up

Annuity sales took a dive during the first quarter, but sales of fixed indexed annuities jumped, thanks in large part to guaranteed-lifetime- withdrawal-benefit riders.

Annuity sales fell to $54.8 billion in the quarter, down 8% from a year earlier, according to data from LIMRA International.

Variable and fixed annuities were hurt by the decline. Strengthening equity markets couldn’t buoy variable annuity sales, which fell to $36.8 billion, down 7% from a year earlier.

The S&P 500 gained 12% in the first quarter.

Of course, insurers’ decision to change their variable annuities to make them more conservative — read: reduced living benefits — helped squash sales.

“As we noted last quarter, we are still seeing companies carefully manage the risks associated with guaranteed-living-benefit riders,” said Joseph Montminy, LIMRA’s assistant vice president for annuity research.

Sales of fixed annuities, too, slipped amid low interest rates. Sales fell 10% from a year earlier.

Indexed annuities, however, rose by 14% in the first quarter, reaching $8.1 billion in sales.

Guaranteed-lifetime-withdrawal benefits helped move the product among customers. Two of three people who bought fixed indexed annuities decided to buy a GLWB rider, which lets customers get lifetime income without annuitizing their contracts.

Allianz Life Insurance Co. of North America held on to its first- place standing among sellers of fixed indexed annuities with its MasterDex X annuity.

Aviva Life and Annuity Co. came in second, according to data from AnnuitySpecs.com.

American Equity Investment Life Holding Co. ranked third.

[email protected]