Index annuity sales surged in 2Q on demand for stable retirement income

Index annuity sales rose during the second quarter, hitting $8.3 billion, according to data from Advantage Group Associates Inc.
AUG 17, 2009
Index annuity sales rose during the second quarter, hitting $8.3 billion, according to data from Advantage Group Associates Inc. That’s an increase of 21.2% from the year-ago period and a gain of 18.3% from the first quarter’s results of $7 billion, according to the Pleasant Hill, Iowa-based research firm. The boost in sales occurred despite a period in which carriers tried to pull back on sales by reducing commissions, lowering the number of agent appointments and cutting off relationships with distributors — all in the name of conserving capital. “The reason sales increased so dramatically is mostly because of folks who are looking for retirement income losing their values in variable annuities and other securities products, as well as the decline of the equities markets,” Sheryl Moore, president of Advantage Group Associates, said in an interview. “They want to maintain the value they still have. They want products with safeties and guarantees,” Ms. Moore added. “People don’t want to lose any money, so they go into fixed annuities to preserve principal.” During the quarter, Aviva USA Corp. of Des Moines, Iowa, held on to its position as the No.1 seller of index annuities, garnering 20% of the market share. Meanwhile, Minneapolis-based Allianz Life Insurance Co. of America’s MasterDex X is the top-selling index annuity, according to Advantage Group Associates. On the index life sales side, second-quarter sales were up to $132.4 million, a 26% gain from the past quarter and a 3% rise from the comparable period in 2008. In this category, Aviva also had a firm foothold in the No. 1 issuer spot, with 21% of the market share. Meanwhile, Pacific Life Insurance Co. of Newport Beach, Calif., was the manufacturer of the No. 1 selling index life product, the Indexed Accumulator III. About 47% of the index life sales involved contracts that spanned nine to 10 years.

Latest News

Advisor moves: RBC swipes $1.7B UBS team, Baird duo departs for LPL's Linsco channel
Advisor moves: RBC swipes $1.7B UBS team, Baird duo departs for LPL's Linsco channel

RBC Wealth Management's latest move in New York adds an elite eight-member team to its recently opened Westchester office.

Stifel star broker, Chuck Roberts, leaves firm under cloud of investor complaints
Stifel star broker, Chuck Roberts, leaves firm under cloud of investor complaints

Stifel – so far - is on the hook for more than $166 million in damages, legal fees and settlements in investor complaints involving Roberts, a 35-year industry veteran.

iCapital secures $820M in latest funding, hits $7.5B
iCapital secures $820M in latest funding, hits $7.5B

The giant alt investments platform's latest financing led by T. Rowe Price and SurgoCap Partners, along with State Street, UBS, and BNY, will fuel additional growth on multiple fronts.

Merrill Lynch on the hook for $3.7M after clients claimed sale of unsuitable private equity
Merrill Lynch on the hook for $3.7M after clients claimed sale of unsuitable private equity

Some investors recently have seen million dollar plus decisions by FINRA arbitration panels involving complex products decisions go their way.

What does it take to feel 'financially comfortable' or 'wealthy' in 2025?
What does it take to feel 'financially comfortable' or 'wealthy' in 2025?

New report shines a light on how Americans view wealth today.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.