WINDSOR, Conn., March 21, 2007 — Driven by record sales of variable annuities, individual annuity sales had a record year in 2006 reaching $236.2 billion, up 9 percent over 2005, according to LIMRA International. For the fourth quarter of 2006, individual annuity sales were $58.9 billion, growing 9 percent compared with the same quarter in 2005.
Variable annuity sales were up 17 percent in the fourth quarter to $41.3 billion, and up 17 percent in 2006, reaching $160.6 billion. This is the sixth straight quarter in which variable annuity sales increased when compared with the same quarter from a year ago.
Fixed annuity sales were down 4 percent for the quarter, declining to $17.6 billion. At $75.6 billion, fixed annuities are down 5 percent for 2006 compared with calendar year 2005. Indexed annuity sales fell 15 percent from the fourth quarter of 2005 with sales of $5.5 billion. Contributing to the decline in fixed annuity sales was an 11 percent decline in book value deferred annuity sales. Sales of market-value-adjusted annuities continued to show improvement compared with the same quarter from a year ago, with sales increasing 80 percent, although they make up a much smaller segment of the fixed annuity market.
Among distribution channels, financial planners and independent broker-dealers had strong total sales growth in both fixed and variable annuities, up 31 percent overall for 2006, followed by stockbrokers and career agents at 14 percent and 11 percent, respectively. Banks increased variable sales 20 percent but had a decline of 14 percent in fixed sales for a net increase of 1 percent.
The results also showed changes in position among the top 20 writers of variable annuities, fixed annuities, and overall total annuities. In the overall total annuity sales, Hartford Life (4th) and Prudential Annuities (8th) both moved up two positions, while Riversource Life (10th) and New York Life (14th) both moved up one position. Aviva, which recently merged with The AmerUs Group, broke into the top 20 overall total annuity writers, coming in at the 19th position.
The top six variable annuity writers remained unchanged, while Prudential Annuities (7th) and Riversource Life (9th) both moved up one position. Aviva moved into the 5th position for fixed annuity writers, and Hartford Life (13th) continued improving its position in the fixed annuity rankings by moving up two positions.
About LIMRA International
LIMRA International is a worldwide association providing research, consulting, and other services to nearly 850 insurance and financial services companies in more than 60 countries. LIMRA was established in 1916 to help its member companies maximize their marketing effectiveness.