Total U.S. annuity sales rose 4% in the first quarter, to $63.6 billion, according to preliminary results from the Secure Retirement Institute.
“First-quarter annuity sales tend to be a bit slower. While sales in the first two months of 2022 were a bit sluggish, annuity sales in March were at record-high levels,” Todd Giesing, assistant vice president at SRI Annuity Research, said in a statement. “Rising interest rates and increased market volatility shifted the product mix this quarter with fixed annuity products driving the overall growth.”
The preliminary first-quarter estimates are based on monthly reporting that represents 85% of the total market.
Fixed annuity sales totaled $35.2 billion, up 14% from the year-ago quarter. That gain reflected double-digit growth for both fixed indexed annuities and fixed-rate deferred annuities.
Sales of fixed indexed annuities totaled $16.3 billion, up 21% from the first quarter of 2021. Fixed-rate deferred annuity sales increased 10% year-over-year to $16 billion.
Traditional variable annuity sales declined to $19.1 billion in the first quarter, down 8% year-over-year.
Registered index-linked annuity, or RILA, sales were $9.3 billion. That was 2% higher than the total in the first quarter of 2021, but it marked a 10% drop from the prior quarter.
“Market conditions in the first quarter have made FIAs more attractive than RILAs," Giesing said. "As a result, the remarkable growth RILAs experienced over the past three years has leveled off.”
Immediate income annuity sales were $1.5 billion in the first quarter, level with first quarter of 2021. Deferred income annuity sales fell 18% to $300 million in the first quarter.
“We finally are beginning to see payout rate increases for income annuities as interest rates improve,” Giesing said. “However, because the Fed has signaled additional rate hikes later this year, we expect investors to wait to lock in rates so sales will likely remain muted in the second and third quarters.”
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