Windsor, Conn, September 11, 2007 — Individual annuity sales hit a U.S. record in the second quarter of 2007 at $66.5 billion, a 6 percent increase over the same period in 2006, according to LIMRA International. Sales for the first half of 2007 were up 3 percent over first half 2006, reaching $124.5 billion.
Variable annuity sales continued their strong growth, rising 13 percent in the second quarter to a record $48.5 billion. Variable annuity sales were up 10 percent year-to-date at $90.6 billion.
Fixed annuity sales continued their declining trend, dropping 10 percent for the quarter to $18.0 billion. At$33.9 billion, total fixed annuity sales were down 12 percent in the first half of 2007. Indexed annuities fell 2 percent to $6.4 billion in the second quarter of 2007 over the second quarter of 2006. Contributing to the quarterly drop in fixed annuity sales were book value deferred annuity sales which fell 24 percent to $6.7 billion and market value adjusted annuities which slipped 6 percent to $1.6 billion.
Sales of fixed income annuities grew in the second quarter of 2007. Fixed immediate annuities were up 13 percent to $1.7 billion and structured settlements grew 7 percent to $1.6 billion.
Among distribution channels, financial planners and independent broker-dealers led variable annuity sales with $13.1 billion, up 15 percent for the quarter. Career agents had the second highest variable annuity sales with $10.7 billion, followed by stockbrokers with $9.1 billion, each growing 11 percent. Independent agents were the largest sellers of fixed annuities with $8.1 billion, down 7 percent from the second quarter of 2006. Banks had the second highest fixed annuity sales with $4.0 billion, down 20 percent for the quarter. Career agents fixed annuity sales volume was next with $2.3 billion, down 21 percent.
Total deferred annuity assets grew 3.6 percent during the second quarter of 2007 reaching a record $2.0 trillion (Figure 1). Indexed annuities had largest percentage increase, growing 5.5 percent to $115.1 billion. Variable annuities, which grew 5.2 percent, had the largest dollar increase, rising $73.2 billion to $1.48 trillion. Fixed-rate annuity assets decreased 2.2 percent, ending the second quarter with $413.8 billion. While inflows exceeded outflows in the second quarter, overall asset growth continues to be driven by investment earnings.
This report also includes a table of the top 20 writers of overall total annuities, variable annuities, and fixed annuities ranked by 2007 year-to-date sales results.
About LIMRA International
LIMRA International is a worldwide research, consulting and professional development organization that helps more than 850 insurance and financial services companies in 73 countries increase their marketing and distribution effectiveness. Visit LIMRA International at www.limra.com.