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LIMRA: Indexed Annuities Post Record Sales in the Third Quarter 2010
11/16/2010
WINDSOR, Conn., Nov. 16, 2010 — Indexed annuities set a new record high in the third quarter of 2010, totaling $8.7 billion, up six percent from the prior quarter and 16 percent over third quarter 2009.
"It is not surprising that sales of indexed annuities had a record quarter," said Joseph Montminy, assistant vice president for LIMRA's annuity research. "This is the ideal market for indexed annuity sales: lots of volatility in the equities markets coupled with low credited rates and declining interest rate spreads on traditional fixed-rate annuities. This has attracted some conservative consumers that might have purchased a traditional fixed-rate annuity. Indexed annuities have now grown to represent 41 percent of the fixed annuity market."
Total individual annuity sales improved one percent during the third quarter as compared to the same period last year to reach $56.1 billion. This was a two percent decline from the second quarter of 2010. In the first nine months of 2010, total annuities hit $164.5 billion, a drop of 11 percent.
Sales of variable annuities (VA) slipped two percent to $34.9 billion in the third quarter as compared to prior quarter. However, this was a nine percent increase from VA sales in the third quarter in 2009. YTD, VA sales equaled $102.8 billion, improving eight percent over the first nine months of 2009
Total fixed annuity sales declined one percent in the third quarter of 2010, when compared to last quarter, to reach $21.2 billion. This was 10 percent lower than sales from the third quarter of 2009. YTD, fixed annuity sales were down 31 percent to $61.7 billion after a record performance in 2009.
Book value annuity sales dropped 11 percent in the third quarter of 2010 as compared to the second quarter of 2010, totaling $7.2 billion. This was 32 percent lower than sales from the same period of 2009. YTD, book value sales were almost half of the premium from the first nine months of 2009. Third quarter MVA sales of $1.8 billion improved 13 percent from the prior quarter but still measured 25 percent below third quarter 2009 levels. Fixed immediate annuity sales dipped slightly to $2.0 billion, a five percent decline from the second quarter of 2010 but 11 percent higher than the same quarter last year.
A list of the top 20 writers of overall total annuities, variable annuities and fixed annuities ranked by third quarter 2010 sales results, as well as the third quarter Annuities Industry Estimates Chart can be found in the updated Fact Tank.
About LIMRA
LIMRA 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.