Total annuity sales for Q1 2013 were $51.7 billion, a 6-percent decrease, according to the first quarter 2013 “U.S. Individual Annuities Sales” survey from LIMRA. The report includes data from 94 percent of the market, LIMRA said. Variable annuity sales declined 4 percent to $35.5 billion, the sixth-consecutive quarter of declines on a year-over-year basis. However, VA sales were 1 percent higher compared to Q4 2012, according to the report, and variable annuity guaranteed living-benefit election rates were steady at 84 percent for the first quarter.
“VA sales continue to struggle despite sustained equity market gains,” said Joseph Montminy, AVP and director of annuity research for LIMRA. “In addition, all significant fixed-annuity product types declined in the first quarter of 2013. In many ways, the current market is more challenging to many annuity manufacturers than the recent financial crisis.”
Fixed annuity sales were $16.2 billion for the quarter, an 11 percent decline compared with the same quarter last year, marking the eighth-consecutive quarter of declines.
Indexed annuity sales hit their lowest point in two years, declining 4 percent to $7.8 billion. Election rates of guaranteed lifetime withdrawal benefit (GLWB) riders on indexed annuities remain strong, however. For Q1, 72 percent of consumers chose a GLWB rider when available. LIMRA said 88 percent of indexed annuities products offer GLWB riders.
Sales of deferred income annuities were $395 million for the quarter, a 147 percent increase compared to the same quarter last year. Four companies entered the DIA market since the beginning of 2012, LIMRA said, and companies are launching new or refined products while others contemplate entering the market.
Fixed immediate annuities declined 6 percent to $1.7 billion for the quarter, according to the report, and fixed-rate deferred annuity sales declined 25 percent to $5.2 billion for the quarter. “To put this into perspective, sales of fixed-rate deferred annuities in 1Q2009 were $26 billion, down 80 percent in four years,” LIMRA said.
Book value sales declined 26 percent to $4.2 billion; market-value adjusted (MVA) sales were $1.0 billion, down 23 percent compared to Q1 2012.
