Annuity sales keep rocketing as FIA and RILA records propel growth

The US annuity market achieved significant growth in the third quarter of 2024, with fixed indexed and registered index-linked annuities driving sales to record levels.

That's according to Limra's latest survey, which showed total annuity sales rose 30 percent year over year to $114.7 billion.

With total sales reaching $332 billion for the year up to the end of September, the industry association said it was one the most remarkable quarters of performance for the industry.

“This was a strong quarter for US individual annuity sales,” Bryan Hodgens, senior vice president and head of Limra research said in a statement Monday. “All product lines posted double-digit increases, and overall sales were less than 1 percent lower than the record-high sales set in fourth quarter 2023.”

Fixed indexed annuities continued their surge to set a new record at $35.2 billion, a 56 percent increase compared to the same quarter last year. Year-to-date FIA sales reached $95.1 billion, up 34 percent from 2023.

“Strong equity market performance and a desire for principal protection continue to attract investor interest in FIA products,” said Hodgens, adding that carriers are enhancing their offerings with more competitive crediting options.

Broadly in line with Limra's previous preliminary estimates, RILA sales also hit a new high to reach $17 billion for the quarter, a 35 percent rise year over year. By the industry association's count, cumulative RILA sales for 2024 have already surpassed the previous year’s total, reaching $47.9 billion.

Limra's breakdown of RILA sales leaders showed Equitable Financial at the top of the RILA leaderboard with $10.5 billion in sales for the nine-month period, followed by Allianz and Prudential, which logged $6.9 billion and $6.2 billion, respectively.

“Limra expects RILA sales to remain strong through 2025,” said Hodgens.

Fixed-rate deferred annuity sales grew 17 percent to $40.3 billion in the third quarter, though early fourth-quarter figures indicate a potential slowdown due to declining interest rates. Meanwhile, income annuity products, including single premium immediate annuities and deferred income annuities, posted 20 percent and 41 percent gains respectively.

“While FRD sales growth remained strong through the third quarter, our October preliminary figures suggest sales are beginning to soften in the face of repeated interest rate cuts (in September and November),” noted Hodgens. “That said, FRD contracts still offer higher yields when compared with other short-term investments."

Traditional variable annuities also recorded a 16 percent increase in sales, with year-to-date totals reaching $44.2 billion, up 13 percent from the prior year. On that score, Jackson National Life came out on top with $7.6 billion in traditional variable annuity sales, followed by Equitable and TIAA, which reported sales of $6 billion and $5.3 billion, respectively.