Annuity sales saw modest growth in the second quarter of 2024, rising nearly 4 percent from the previous quarter, according to a new report from market research firm Wink.
In its latest Sales & Market Report, Wink said annuity sales for Q2 ticked up to reach $109 billion, with some product lines achieving record-setting results as others experienced declines due to shifting interest rates.
Nearly all those dollars – roughly $104 billion – came from deferred annuity sales, which increased slightly from Q1 2024 and surged nearly 33 percent compared to the same period last year.
Multi-year guaranteed annuities (MYGAs) saw a decline of over 6 percent from the previous quarter due to rate drops and increased demand from competing product lines. Despite this, MYGA sales still grew more than 34 percent year-over-year, totaling some $41 billion for the quarter. Wink noted that MYGAs were coming off their second-highest quarter on record, making it difficult to surpass past performance.
“We are projecting that 2024 will be a record year for MYGA sales, given their relative competitiveness to CDs,” the report said.
Fixed-rate annuities faced similar challenges, with a more than 7 percent decline from the previous quarter attributed to falling rates, though the products showed modest year-over-year sales growth. The report suggests that continued rate declines could lead to further losses in fixed annuities in 2024.
In contrast, indexed annuities saw robust double-digit growth to post a record quarter, with sales climbing more than 10 percent from Q1 and nearly 30 percent year-over-year to reach $32 billion. The report attributed this to competitive gains and favorable market conditions.
Seventy percent of the top 20 indexed annuity providers saw significant sales increases, with 75 percent reporting double- or triple-digit gains from Q2 2023. “It is anticipated that indexed annuities will set another record this year,” the report noted.
Structured annuities also showed strong momentum, with quarterly sales up nearly 45 percent year-over-year. “Sales for the quarter were up double-digits, pushing the product line into uncharted territory,” the report observed.
Variable annuities also enjoyed a comeback with double-digit growth from the previous quarter, but they remained overshadowed by other product lines, hauling in just over $15 billion. The report indicated that market volatility later this year could dampen variable annuity sales, though 2024 is still expected to outperform last year’s figures for the category.
“While variable annuity sales in 2024 will exceed last year’s performance, it is not anticipated that they will set any records,” the report said.
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