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U.S. Individual Annuity Sales Grow Eight Percent
2/27/2008
Windsor, CT, February 27, 2008 — Total individual annuity sales had a record year in 2007 reaching $257.4 billion, up eight percent over 2006, according to LIMRA International.
"Variable annuity (VA) sales experienced strong growth in 2007 as individuals leveraged guaranteed living benefit riders available in VA products to protect themselves against recent market volatility,” said Joe Montminy, associate research director for LIMRA's annuity research. “This was the tenth consecutive quarterly increase in variable annuity sales when compared to the same quarter from the prior year."
Variable annuity sales grew 15 percent hitting a record $184.2 billion in 2007, and jumped 17 percent in the fourth quarter reaching $48.2 billion when compared to the same quarter from a year ago.
Total fixed annuity sales declined seven percent in 2007 to $73.2 billion. Total fixed annuities include both fixed deferred annuities (book value, indexed, and market-value adjusted annuities) and fixed income annuities (fixed immediate annuities and structured settlements). There were signs of improvement for fixed annuity sales in the fourth quarter. Total fixed annuity sales improved seven percent in the fourth quarter to $19.5 billion.
In 2007, fixed deferred annuity sales declined nine percent to $60.3 billion while sales of fixed income annuities were up eight percent to $12.9 billion. For the fourth quarter of 2007, sales of fixed deferred annuities improved by six percent to $16.0 billion and fixed income annuity sales were up nine percent to $3.5 billion when compared to the same quarter from a year ago.
Total deferred annuity assets declined 0.9 percent to $2.02 trillion in the fourth quarter of 2007 (Figure 1). The drop in overall assets in the fourth quarter was overwhelmingly due to a decline in 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 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.