Industry-wide first quarter annuity sales reached $53.1 billion, which is down about 2.5 percent from $54.5 billion the previous quarter, according to the Insured Retirement Institute.
The IRI today announced final first quarter 2012 sales results for the U.S. annuity industry based on data reported by Morningstar Inc. and Beacon Research.
Variable annuity total sales were down 2.7 percent to $36.2 billion from $37.2 billion in the fourth quarter of 2011, according to Morningstar. Despite the dip, variable annuity net assets reached an all-time high of $1.61 trillion during the first quarter of 2012, a 7.2 percent increase from $1.50 trillion during the fourth quarter of 2011.
"We believe the long-term horizon for the industry looks strong," said Cathy Weatherford, IRI president and CEO. “The historic level of variable annuity net assets shows that insured retirement strategies are, more and more, becoming the savings vehicle of choice for many consumers."
Yet, according to Morningstar, quarterly net variable annuity sales decreased 34.5 percent year-over-year to $3.8 billion in the first quarter of 2012 from $5.8 billion during the same period in 2011.
Fixed annuity sales for the first quarter also dipped 2.2 percent to $16.9 billion from $17.3 billion during the fourth quarter of 2011, according to Beacon Research. There were about $7.3 billion in qualified sales and $9.6 billion in non-qualified sales during the first quarter.
Within the fixed annuity market, however, the income annuity segment continues to experience higher growth as first-quarter sales rose nearly 23 percent compared with the same period in 2011. Indexed annuity first-quarter sales also were higher, with sales up nearly 9 percent compared with the first quarter of 2011.
"Growing demand for guaranteed retirement income helped push income and indexed annuity sales above year-ago levels," said Beacon Research President Jeremy Alexander. "Market value adjustments enabled carriers to credit a higher rate of interest, and that boosted quarter-to-quarter sales of these products."
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