Low interest rates continue to weigh on the annuity industry, but sales of deferred income annuities increased 150 percent compared to last year and set a fifth-consecutive record high in Q1 2013, according to the “Beacon Research Fixed Annuity Premium Study.” Overall, income annuity sales grew 1.4 percent year-over-year.

“Deferred income annuities were a bright spot in a difficult quarter,” said Jeremy Alexander, CEO of Beacon Research. “Ongoing product development and increasing sales underscore the importance of generating guaranteed retirement income for consumers and their advisors.”

Fixed annuity sales totaled $15 billion for the quarter, an 11.7-percent decrease from a year ago and a 7.7-percent decrease from the previous quarter. Fixed rate market value-adjusted (MVA) sales, however, declined modestly compared to the previous quarter, which suggests “consumers are willing to accept some potential interest rate risk in exchange for higher credited rates,” Beacon said.

Indexed annuity sales totaled $7.8 billion, a 7.9-percent decrease from the previous quarter; fixed rate non-market value-adjusted (MVA) totaled $4.0 billion, an 8.1-percent decline from the previous quarter. Income annuities dropped 8.2 percent.

The top fixed annuity company in Q1 2013 was Allianz, followed by Security Benefit Life, New York Life, American Equity and Jackson National. Security Benefit Life moved to second place; New York Life remained in third; American Equity moved up fourth and Jackson National rejoined the top five, Beacon said.

 

Total Fixed Annuity Sales

Allianz Life $1.164 billion

Security Benefit $1.106 billion

New York Life $1.079 billion

American Equity $ 929 million

Jackson National $ 744 million

Security Benefit Life had two of the five top-selling fixed annuities for the for the quarter; its Total Value Annuity was the bestseller, having moved up from fourth place last quarter, and Secure Income Annuity, which entered the top five in third place. New York Life’s Lifetime Income Annuity, the quarterly bestseller throughout 2012, finished second, Beacon said. American Equity’s Bonus Gold and Allianz’s Endurance Plus indexed annuities fell dropped two slots. The top five:

 

Security Benefit's Life Total Value Annuity (Indexed)

New York Life's NYL Lifetime Income Annuity (Income)

Security Benefit Life's Secure Income Annuity (Indexed)

American Equity's Bonus Gold (Indexed)

Allianz Life's Endurance Plus (Indexed)

 

“We expect that fixed annuity sales in the coming months will follow the pattern set early in the year,” Alexander said. “Sales may increase slightly coming off from a record year for indexed and income annuities, but low interest rates will continue to hamper significant growth in the near future.”

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