UPDATED: LIMRA Secure Retirement Institute: Total Annuity Sales Have Best Quarter in Nearly 10 Years
Total fixed annuities fueled overall annuity growth and reached an all-time high at $133.5 billion
WINDSOR, Conn., March 21, 2019 – In 2018, total annuity sales increased 15 percent to $233.7 billion, compared with 2017 results, according to LIMRA Secure Retirement Institute’s Fourth Quarter 2018 U.S. Retail Annuity Sales Survey.
Total annuity sales for the fourth quarter were $62.6 billion, a 23 percent increase compared to the same quarter of 2017. Fourth quarter 2018 represents the highest quarterly total annuity sales since first quarter 2009, and the first time annuity sales have exceeded $60 billion since the fourth quarter of 2015.
“Individual annuity sales for 2018 finished the year strong, particularly sales of fixed annuity products,” said Todd Giesing, director, Annuity Research, LIMRA Secure Retirement Institute. “All fixed annuity products experienced growth in 2018, and fixed annuity sales accounted for nearly 60 percent of overall individual annuity sales, a significant change from just five years ago.”
Fixed Annuity Sales Reach Record Levels Driven by Indexed Annuities
Total fixed annuity sales increased in the fourth quarter, up 49 percent to $37.8 billion. For the year, fixed annuity sales rose 27 percent to $133.5 billion. This is an all-time high for fixed annuity sales.
Fourth quarter indexed annuity sales set an all-time quarterly record at $19.5 billion, a 40 percent increase, compared with fourth quarter 2017 results. For the year, fixed indexed annuity sales rose 27 percent to $69.6 billion, compared with prior year. This is also a record and exceeds the previous annual fixed indexed annuity sales record by $10 billion.
“Total fixed annuities had a record breaking fourth quarter, achieving the highest level of sales for fixed annuities in a quarter – ever,” noted Giesing. “This jump in quarterly sales can be attributed to higher interest rates and increased equity market volatility. This is the fourth consecutive year where annual fixed annuity sales surpassed $100 billion. This is the first time it has occurred since LIMRA SRI began tracking sales.”
Fixed rate deferred annuities (Book Value and MVA) sales increased 80 percent in the fourth quarter to $13.3 billion. Full year fixed-rate deferred annuity sales for 2018 were $45.7 billion, 34 percent higher than 2017 results. This is the first time annual fixed-rate deferred sales have exceeded $40 billion since 2009.
Fixed immediate annuity sales rose 29 percent in the fourth quarter to $2.7 billion, which represents the highest quarterly sales recorded for immediate income annuities. For the year, income annuity sales increased 17 percent, to $9.7 billion.
Deferred income annuity (DIA) also increased in the fourth quarter, up 20 percent to $655 million. For the year, DIA sales were 4 percent higher than 2017 results, reaching $2.3 billion.
VA Sales Decline Slightly in Fourth Quarter
U.S. variable annuity (VA) sales were $24.8 billion in the fourth quarter, down 3 percent compared with prior year results. Total VA sales for 2018 were $100.2 billion, a 2 percent increase over 2017 results. Fixed annuity sales have outperformed VA sales in 10 of the last 12 quarters.
Registered indexed-linked annuity sales (RILAs) were $3.5 billion this quarter, an increase 51 percent compared to fourth quarter 2017 results. For the year, RILA sales were $11.2 billion, up 22 percent compared to prior year, and represent more than 10 percent of total VA sales.
The fourth quarter 2018 Annuities Industry Estimates can be found in LIMRA’s Fact Tank.
To view the top twenty rankings of total, variable and fixed annuity writers for 2018, please visit Fourth Quarter 2018 Annuity Rankings. To view the top twenty rankings of only fixed annuity writers for 2018, please visit Fourth Quarter 2018 Fixed Annuity Rankings.
LIMRA Secure Retirement Institute's Fourth Quarter U.S. Individual Annuities Sales Survey represents data from 94 percent of the market.
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LIMRA Secure Retirement Institute provides comprehensive, unbiased research and education about all aspects within the retirement industry to improve retirement readiness and promote retirement security. For more information, please visit www.secureretirementinstitute.com.