Led by record demand for registered index-linked annuities, total third-quarter annuity sales rose 11% year over year to $89.4 billion, according to preliminary results from Limra’s U.S. Individual Annuity Sales Survey.
Limra said RILA sales hit a new record in the third quarter of $12.6 billion, up 19% from the same period last year. RILA sales for the first nine months of the year were $34.4 billion, 11% higher than the same period last year.
Total annuity sales increased 21% to $270.6 billion through the first nine months of 2023, LIMRA said.
“Equity markets rebounding in 2023 combined with a strong increase in interest rates has allowed insurance companies to add additional value in their annuity offerings to investors,” Todd Giesing, assistant vice president at Limra Annuity Research, said in a statement. “Limra expects 2023 sales will surpass the record sales set in 2022.”
In addition to the strong RILA performance, the report showed fixed indexed annuity sales were $23.3 billion in the third quarter, up 8% from last year's Q3. FIA sales increased 25% to $71.7 billion year-to-date.
Rising interest rates also boosted single-premium immediate annuity sales, which came in at $3 billion in the third quarter, 20% higher than the prior year’s results. In the first nine months of 2023, SPIA sales jumped 63% to $9.8 billion, according to the Limra report.
Meanwhile, deferred income annuity sales totaled $950 million, up 88% from sales in the third quarter of 2022, Limra said. In the first nine months of the year, DIA sales jumped 104% to $2.8 billion. And fixed-rate deferred annuity sales were $34.4 billion in the third quarter, which was a 13% increase from the second quarter and 15% higher than third-quarter 2022 results.
On the flip side, Limra said traditional variable annuity sales were $13.1 billion in the third quarter, down 7% from the third quarter 2022 results. So far this year, traditional annuity sales have totaled $39.2 billion, falling 20% compared with the same period in 2022.
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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.
