Fixed and variable annuity sales through the first six months of the year are at their lowest level since 2001, according to figures released on Wednesday.
Second-quarter 2017 annuity sales data was released this week by both the LIMRA Secure Retirement Institute and Wink’s Sales & Market Report, and while the April-June second quarter fared better than the first three months of the year in many categories, both sets of data show overall sales declines compared to 2016 figures.
LIMRA says total annuity sales are down 10% in the first six months of 2017 after declining by 8% over the second quarter compared to last year.
The Wink report says total second quarter 2017 non-variable deferred annuity sales were up over 2.2% from the prior quarter, but were down over 9.3% from the same period in 2016.
What follows are the detailed reports from both organizations, including sales data for various annuity product lines and carrier rankings.
LIMRA Secure Retirement Institute: First half 2017 annuity sales reach lowest level in 16 years
In the first half of the year, total annuity sales decreased 10% to $105.8 billion compared with the first six months of 2016, according to LIMRA Secure Retirement Institute’s Second Quarter 2017 U.S. Retail Annuity Sales Survey, released Aug. 23. First half sales have not been this low since 2001.
Second quarter results for total annuity sales were $53.9 billion, a slight uptick from first quarter, but an 8% decline from this quarter last year. This is the fifth consecutive quarter of decline in overall annuity sales. It is also the sixth straight quarter fixed annuity sales have outperformed variable annuity sales, which hasn’t happened in almost 25 years.
Variable annuities
U.S. variable annuity (VA) sales were $24.7 billion in the second quarter, down 8% compared with prior year results. This marks the 14th consecutive quarter of decline in VA sales. Sales from the first half of 2017 VA sales were $49.1 billion — 8% lower than the first six months of 2016.
“A closer look at what’s driving the drop in VA sales reveals qualified VA sales have experienced a more significant decline than non-qualified VAs,” said Todd Giesing, director, Annuity Research, LIMRA Secure Retirement Institute. “VA qualified sales were down 16% in the second quarter, while nonqualified sales were actually up 5%. This could be in reaction to the DOL fiduciary rule.”
Second quarter qualified VA sales accounted for 58% of retail variable annuity sales, a five-percentage points decline from the same quarter last year.
Sales of fee-based variable annuities increased in the second quarter to $570 million, representing 2.3% of the total VA market. While this is a small portion of the overall VA market, these products have seen continued growth over last year.
Another VA product line that has experienced growth is structured variable annuities. In the second quarter, sales of these products increased 36%, reaching $1.8 billion, which represents 7% of the VA market.
The Institute forecasts that VA sales will drop 10-15% in 2017, totaling less than $100 billion. This has not occurred since 1998.
Fixed annuities
Fixed annuity sales also declined in the second quarter. Sales were down 7% to $29.2 billion. All fixed product lines sales, except structured settlements, experienced declines. In the first half of 2017, fixed sales fell 11% to $56.7 billion.
Second quarter indexed annuity sales totaled $15.6 billion, a 15% increase from first quarter but are still 4% lower than prior year results. Nine of the top 10 companies have reported quarter-over-quarter growth. The Institute predicts indexed annuity sales will decline 5-10% in 2017.
Fixed rate deferred annuities (Book Value and MVA) sales dropped 11% in the second quarter to $9.3 billion. Year-to-date, fixed rate deferred annuity sales were $19.4 billion, 14% lower compared to 2016 results.
In the second quarter, deferred income annuity (DIA) and single premium income annuity (SPIA) sales both experienced declines. DIA sales were down 31% to just $600 million. SPIAs were down to $2.2 billion in the second quarter—a 12% drop.
The second quarter 2017 Annuities Industry Estimates can be found in LIMRA’s Data Bank. To view variable, fixed and total annuity sales over the past 10 years, please visit Annuity Sales 2007-2016. To view the top 20 rankings of total, variable and fixed annuity writers for second quarter 2017, please visit Second Quarter 2017 Annuity Rankings. To view the top 20 rankings of only fixed annuity writers for second quarter 2017, please visit Second Quarter 2017 Fixed Annuity Rankings. LIMRA Secure Retirement Institute’s Second Quarter U.S. Individual Annuities Sales Survey represents data from 97% of the market.
Wink Sales & Market Report: Indexed annuity sales surge in second quarter, but still trail 2016 levels
Total second quarter 2017 non-variable deferred annuity sales totaled just over $23.5 billion; up over 2.2% from the prior quarter, but down over 9.3% from the same period in 2016.
This according to the latest edition of Wink’s Sales & Market Report, released on Aug. 22. Fifty-four indexed annuity providers, 52 fixed annuity providers, and 56 MYGA companies participated in the report.
Allianz Life ranked as the No. 1 carrier overall for non-variable deferred annuity sales, with a market share of 9.3%. New York Life carried the second position with Athene USA, Global Atlantic, and AIG rounding out the top five carriers in the market, respectively.
Allianz Life’s Allianz 222 indexed annuity was the top-selling non-variable annuity, for all channels combined, in overall sales in the second quarter.
Indexed annuities
Total indexed annuity sales for the second quarter were just over $14.6 billion; up more than 13.3% when compared to the previous quarter, but down nearly 6% when compared with the same period last year.
“It will be interesting to see if the delay on the Department of Labor’s Fiduciary Rule will translate to increased sales of indexed annuities,” said Sheryl J. Moore, president and CEO of both Moore Market Intelligence and Wink, Inc. “Sales are the greatest they have been in a year, but there is still more momentum needed to return indexed annuities to their record-setting sales levels.”
Noteworthy highlights for indexed annuities in the second quarter included Allianz Life retaining its top ranking in indexed annuities, with a market share of 15%. Athene USA, Nationwide, American Equity Companies, and Great American Insurance Group rounded out the top five carriers in the indexed annuity market.
Allianz Life’s Allianz 222 Annuity was the No. 1-selling indexed annuity for the 12th consecutive quarter.
Traditional fixed annuities
Total sales of fixed annuities in the second quarter were just over $10 billion, down over 7% when compared to the previous quarter and down nearly 39% when compared with the same period last year. Traditional fixed annuities have a one-year guaranteed fixed rate.
Noteworthy highlights for traditional fixed annuities in the second quarter include Jackson National Life ranking as the No. 1 carrier with a market share of 14.4%. Modern Woodmen of America attained the second-ranked position. Great American, Global Atlantic Financial Group, and Reliance Standard rounded out the top five carriers in the market, respectively.
Forethought Life’s ForeCare Fixed Annuity was the top-selling fixed annuity for the quarter, for all channels combined.
MYGA
MYGA sales for the second quarter were over $7.8 billion, down more than 12.4% compared to the previous quarter, and down nearly 11% when compared to the same period last year. MYGA annuities have a fixed rate that is guaranteed for more than one year.
Noteworthy highlights for MYGAs in the second quarter include New York Life ranking as the No. 1 carrier with a market share of 21.8%. Global Atlantic moved into the second position while AIG, Delaware Life, and Symetra Financial rounded out the top five.
Forethought’s SecureFore 3 Fixed Annuity was the best-selling multi-year guaranteed annuity for the second quarter, for all channels combined.
“The interest rate environment is not favorable for sales of fixed and multi-year guaranteed annuities,” Moore said. “This trend should change next quarter for multi-year guaranteed rate fixed products, as several MYGA rate specials occurred in the second quarter.”
Wink’s Sales & Market Report, the insurance industry’s No. 1 resource for indexed annuity sales data since 1997, is in its third year of reporting on all non-variable deferred annuities, which include indexed annuity, traditional fixed annuity, and multi-year guaranteed annuity (MYGA) product lines. While Wink currently reports on indexed annuity, fixed annuity, and multi-year guaranteed annuity product sales, the firm looks forward to reporting on immediate annuity and variable annuity product sales in the future. For more information, go to www.LookToWink.com.
About Moore Market Intelligence: The staff at Des Moines-based Moore Market Intelligence has the combined experience of more six decades working with indexed insurance products. The firm provides services in speaking, research, training, product development, and marketing of indexed annuities and indexed life insurance. Sheryl J. Mooreis president and CEO of this specialized third-party market research firmand the guiding force behind the industry’s most comprehensive life insurance and annuity due diligence tools, AnnuitySpecs and LifeSpecs distributed byWink, Inc. Moore is the author of the quarterlyWink’s Sales & Market Report.
