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WINDSOR, Conn., Sept. 3, 2008 — U.S. individual annuity sales improved four percent to reach $68.4 billion in the second quarter of 2008, according to LIMRA. Sales for the first half of 2008 were up seven percent over first half of 2007, reaching $131.9 billion.

The increase in second quarter individual annuity sales resulted from a 46 percent jump in fixed annuity sales, compared to the same quarter of the prior year. Fixed annuities include deferred annuities (book value, indexed, and market-value adjusted annuities), as well as immediate annuities and structured settlements. Fixed annuity sales reached $26.2 billion in the 2nd quarter and $47.6 billion year-to-date.

Second quarter fixed deferred annuity sales growth was lead by market value adjusted annuities ($3.7 billion) at 118 percent, followed by book value ($12.4 billion) at 91 percent. Indexed annuities increased 5 percent to $6.8 billion. Fixed immediate annuity sales improved 25 percent to $2.0 billion while structured settlements fell 19 percent to $1.3 billion.

"Banks have taken over as the largest distribution channel, as the multi-year trend of increasing VA sales and decreasing fixed annuity sales may be coming to an end,” said Dan Beatrice, analyst at LIMRA. “A favorable interest rate environment combined with weak equity market returns enabled banks to expand their fixed annuity sales 101 percent, raising their total annuity sales 31 percent.”

Year-to-date sales through banks reached $25.8 billion. Among the remaining distribution channels, total annuity sales for career agents were $25.3 billion, matching sales from the first half of 2007. Financial planners and independent broker-dealers annuity sales were down 2 percent at $24.9 billion, independent agents gained 11 percent to $22.8 billion, stockbroker’s annuity sales declined 7 percent to $17.6 billion, direct response sales were up 9 percent to $9.4 billion, and annuity sales through other systems were up 13 percent to $6.1 billion.

Year-to-date sales through banks reached $25.8 billion. Among the remaining distribution channels, total annuity sales for career agents were $25.3 billion, matching sales from the first half of 2007. Financial planners and independent broker-dealers annuity sales were down 2 percent at $24.9 billion, independent agents gained 11 percent to $22.8 billion, stockbroker’s annuity sales declined 7 percent to $17.6 billion, direct response sales were up 9 percent to $9.4 billion, and annuity sales through other systems were up 13 percent to $6.1 billion.

Industry deferred annuity assets experienced very little change in the second quarter of 2008, growing only 0.2 percent to $1.95 trillion. Total inflows exceeded outflows, yet variable annuity losses in investment earnings offset most of this gain. To view the net flow results, Industry Deferred Annuity Net Flows Estimates Second Quarter, 2008.

We have provided a link to a table of the top 20 writers of overall total annuities, variable annuities and fixed annuities ranked by second quarter 2008 sales results, as well as the second quarter Annuities Industry Estimates Chart.

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 at www.limra.com.

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