WINDSOR, Conn., Feb. 24, 2009 – While sales of variable annuities slumped, fixed annuity sales soared 79 percent in the fourth quarter to end 2008 at a record-setting single year figure of $109.4 billion which kept overall annuity sales growth in positive territory, according to LIMRA's U.S. Individual Annuities Fourth Quarter 2008 Sales Report.
"As expected, variable annuity sales followed the downward trend of the equity market," said Joe Montminy, research director for LIMRA's annuity research. "It's encouraging that consumers are turning to fixed annuities for their retirement income needs and as a result, overall individual annuity sales posted a three percent gain reaching $265 billion in 2008."
Variable annuities (VA) declined 30 percent in the fourth quarter of 2008 as compared to the fourth quarter of 2007. It's important to note that 2007 was a record year for VA sales. While 2008 year-end sales for VAs were down 15 percent, VA sales have rebounded from larger deficits. In 2001, VA sales dropped 19 percent yet saw double-digit growth within two years. In 2008, total VA sales reached $155.6 billion.
Sales increased for all fixed deferred annuity product types in 2008, lead by a 135 percent increase in market value adjusted products. Sales of book value products, the largest fixed annuity product type, grew 84 percent. Indexed annuity sales increased six percent. Immediate fixed annuity sales, while small in total, increased 23 percent in 2008, fueled by growing numbers of retirees seeking guaranteed lifetime income.
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