Propelled by $286.6 billion in fixed annuity sales, total U.S. annuity sales reached a record-high $385.4 billion in 2023, jumping 23% year over year, according to final results from LIMRA’s U.S. Individual Annuity Sales Survey released this week.
“For the second consecutive year, annuity sales have surpassed previously held records, largely due to broader engagement with independent distribution,” said Bryan Hodgens, head of LIMRA research. “Rising interest rates have made annuities very attractive to a larger group of investors who are served by independent advisors and broker dealers. LIMRA data shows independent agents’ and broker-dealers’ sales collectively grew 29% from 2022 and represented 41% of 2023 sales.”
In the fourth quarter, total annuity sales were $115.7 billion, a 29% increase from the fourth quarter of 2022 and 23% higher than the record set in first quarter 2023.
Fixed-Rate Deferred
Total fixed-rate deferred annuity sales were $58.5 billion in the fourth quarter, 52% higher than fourth quarter 2022 sales. This is the best sales quarter for fixed-rate deferred annuities ever documented. In 2023, fixed-rate deferred annuities totaled $164.9 billion, up 46% from the 2022 annual high of $113 billion.
“In addition to favorable interest rates, demographics have also played a role in the surge of fixed-rate deferred sales,” Hodgens said. “The number of Americans over age 60 continues to grow and many more of them will be relying on Social Security and their savings to fund their retirement. Given the economy of the past few years, it isn’t surprising that more are buying a product offering investment protection and guaranteed growth at a higher rate than money market accounts and CDs.”
Fixed Indexed Annuities
Fixed indexed annuity (FIA) sales also had a record year. In 2023, FIA sales totaled $95.9 billion, up 20% from the prior year. In the fourth quarter, FIA sales were $24.9 billion, a 12% increase from fourth quarter 2022.
“FIA sales by independent agents and independent broker dealers grew by 24% year over year and represented more than 74% of the total FIA sales,” noted Hodgens. “We continue to see a shift to independent distribution. Rising interest rates helped increase demand for clients looking to protect their principal investment from equity market volatility while benefiting from higher crediting rates.”
Income Annuities
Higher interest rates also lifted income annuity product sales. Single premium immediate annuity (SPIA) sales were $3.6 billion in the fourth quarter, 13% higher than the prior year’s results. In 2023, SPIA sales jumped 45% to $13.3 billion, setting a new annual sales record.
Deferred income annuity (DIA) sales were $1.3 billion in the fourth quarter, increasing 83% from sales in the fourth quarter 2022. For the year, DIA sales nearly doubled (up 97%) to $4.2 billion.
Registered Index-Linked Annuities
Registered index-linked annuity (RILA) sales were $13 billion in the fourth quarter, up 29% from the fourth quarter 2022. This marks the first time RILA product sales have surpassed traditional variable annuity sales. Total RILA sales reached $47.4 billion in 2023, 15% higher than prior year and a new all-time high for the product line’s sales.
Traditional Variable Annuities
Despite the strong equity market growth in 2023, traditional variable annuity (VA) sales fell for the quarter and the year. Fourth quarter traditional VA sales fell 3% year over year to $12.3 billion and total 2023 sales dropped 17% to $51.4 billion.
For more details on the sales results, go to Fourth Quarter 2023 Annuities Industry Estimates in LIMRA’s Fact Tank.
• To view the top 20 rankings of total, variable and fixed annuity writers in 2023, see 2023 Top 20 Annuity Rankings.
• To view the top 20 rankings of traditional VA and RILA sales leaders in 2023, visit 2023 Variable Annuity Breakout Rankings.
For the top 20 rankings of fixed-rate deferred, fixed indexed and payout annuity writers in 2023, visit 2023 Fixed Annuity Breakout Rankings.
SEE ALSO:
• F&G Annuities & Life Launches Its First Registered Index-Linked Annuity
