For the third straight day, the annuities sector reported positive second quarter numbers despite the falling interest rates.
On Tuesday,
“We anticipated the sequential growth in both indexed and income annuities,” said Jeremy Alexander, CEO of Beacon Research. “Indexed annuity cap rates trended lower, but still looked good compared to the quarter’s declining fixed rates on annuities and CDs. We also expected falling interest rates to dampen sales of both fixed rate annuity types. But yield-seeking purchasers apparently appreciated the somewhat higher rates offered by MVAs.”
According to Beacon’s study, of the four product types, only fixed-rate non-market value adjustment annuities (MVAs) faltered, falling five percent to $8.2 billion. Meanwhile, income annuities grew 30 percent to $2.3 billion, indexed annuities improved 18 percent to $8.4 billion and fixed-rate MVAs increased 4 percent to $1.5 billion.