Q1 annuity sales top $105B amid persistent economic worries: Limra

US annuity sales exceeded $105 billion in the first quarter of 2025, according to preliminary data from Limra, maintaining momentum for a sixth straight quarter despite falling slightly short of last year’s record-setting pace.

The latest initial print from the life insurance and annuity industry association, which draws from data covering 84 percent of the US individual annuity market, showed total sales reaching $105.4 billion, down 1 percent from the same period in 2024.

“For the sixth consecutive quarter, total annuity sales topped $100 billion, demonstrating the elevated interest in principal protection and guaranteed income continues,” Bryan Hodgens, senior vice president and head of Limra research, said in a statement announcing the results.

He cited findings from the organization’s Consumer Sentiment Survey that point to rising concern over the economy since January – a trend that helped push March annuity sales to their second-highest level ever recorded. Another recent reading from the Conference Board found consumer sentiment plunging eight points in April to a near five-year low.

Registered index-linked annuities (RILAs) continued to gain ground, with first-quarter sales climbing 21 percent year over year to $17.5 billion. Hodgens attributed the growth to product development, increased distribution, and broader market adoption.

“These products are attractive to both insurers and investors, providing investors the ability to mitigate equity market downturns and allowing companies greater flexibility to hedge against risk,” he said.

Traditional variable annuities also posted growth, rising 14 percent from a year earlier to $15.6 billion. This marked the fifth straight quarter of annual gains for the product category.

Fixed-rate deferred annuity (FRD) sales, while down 8 percent from a year ago at $39.5 billion, rebounded sharply from the previous quarter. Hodgens noted that FRDs continue to attract conservative investors, with average crediting rates for three-year contracts remaining significantly higher than comparable CDs.

“Even with expected interest rate cuts, FRD sales will be above $120 billion in 2025,” he added.

Bets on interest rate reductions from the Federal Reserve accelerated in the days following President Donald Trump's Liberation Day announcement as analysts warned his aggressive trade policy approach pose real risks to the economy.

Fed policymakers and Fed Chair Jerome Powell have largely maintained a wait-and-see attitude. Still, Powell managed to shake up markets in mid-April, when he acknowledged that tariffs could challenge the central bank by hitting both sides of its dual mandate to balance employment and price stability.

Fixed indexed annuities saw a 7 percent drop in sales to $26.7 billion, though still ranked among the top five quarters historically. Income annuities declined more steeply, with single premium immediate annuities falling 17 percent and deferred income annuities sliding 19 percent.

Despite these declines, Hodgens remains optimistic. “Sales of these products remain higher than historical norms,” he said, pointing to increased awareness and interest in annuities' investment protection features.