Annuities fell in 1Q; indexed up

JUN 06, 2012
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]

Latest News

No succession plan? No worries. Just practice in place
No succession plan? No worries. Just practice in place

While industry statistics pointing to a succession crisis can cause alarm, advisor-owners should be free to consider a middle path between staying solo and catching the surging wave of M&A.

Research highlights growing need for personalized retirement solutions as investors age
Research highlights growing need for personalized retirement solutions as investors age

New joint research by T. Rowe Price, MIT, and Stanford University finds more diverse asset allocations among older participants.

Advisor moves: RIA Farther hails Q2 recruiting record, Raymond James nabs $300M team from Edward Jones
Advisor moves: RIA Farther hails Q2 recruiting record, Raymond James nabs $300M team from Edward Jones

With its asset pipeline bursting past $13 billion, Farther is looking to build more momentum with three new managing directors.

Insured Retirement Institute urges Labor Department to retain annuity safe harbor
Insured Retirement Institute urges Labor Department to retain annuity safe harbor

A Department of Labor proposal to scrap a regulatory provision under ERISA could create uncertainty for fiduciaries, the trade association argues.

LPL Financial sticking to its guns with retaining 90% of Commonwealth's financial advisors
LPL Financial sticking to its guns with retaining 90% of Commonwealth's financial advisors

"We continue to feel confident about our ability to capture 90%," LPL CEO Rich Steinmeier told analysts during the firm's 2nd quarter earnings call.

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.