Annuity sales rose 16% last year

Total annuity sales rose 16% in 2021, to $254.8 billion, the third highest total on record and the highest level since 2008, according to data collected by the Secure Retirement Institute.

By category, total variable annuity sales were $125.6 billion, 27% higher than 2020, while traditional VA rose 16% to $86.6 billion.

“We have not seen traditional VA sales growth at this level in over a decade. Heightened concern about potential changes to the tax code drove growth in investment-focused, nonqualified product sales,” Todd Giesing, assistant vice president of annuity research at the institute, said in a statement. “In 2021, fee-based products experienced the largest gains as registered investment advisors and broker-dealers sought out tax-deferral solutions for their clients.”

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Registered index-linked annuity sales hit a record $39 billion last year, 62% higher than the total in 2020, which Geising attributed to “current economic conditions and expanded competition as new carriers enter the market.”

Sales of fixed annuities increased 7% to $129.2 billion in 2021, while fixed indexed annuity sales were $63.7 billion, up 15% from the prior year.

“Improved interest rates and product innovation around cap rates helped address the pricing challenges FIA carriers faced early in 2021, making the products more attractive to investors,” Giesing said.

Fixed-rate deferred annuity sales rose 2% to $53.4 billion, while deferred income annuity sales totaled $1.9 billion, which was up 14% from 2020, but still below 2019’s $2.5 billion.

The Secure Retirement Institute is part of the insurance research and education group LL Global.

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