Income annuity sales increased more than 22 percent in the first quarter of 2012 and for the first time, an income annuity was the top selling product, according Beacon Research’s “Fixed Annuity Premium Study.” Indexed annuity sales increased more than 8 percent.

“Both product types did well despite lower interest rates due to demand for guarantees in general and reliable retirement income in particular,” said Jeremy Alexander, CEO of Beacon Research. “The success of New York Life’s deferred income annuity also helped boost overall income annuity results, and indexed annuity cap rates looked comparatively good relative to CD and annuity fixed rates.”

According to Beacon, total fixed-annuity sales for Q1 2012 were $16.9 billion; fixed rate market value adjustments (MVA) increased 1.6 percent from the prior quarter.

Sales volume for other product types declined 2.2 percent overall.

Compared with the same period last year, sales of fixed rate annuities declined 8.8 percent.

Estimated Sales by Product Type (in $ millions)
Total

Fixed Rate Non-MVA

Fixed Rate MVA

Indexed Income
Q1-'12 16,943 5,253 1,368 8,166 2,156
Q4-'11 17,330 5,409 1,346 8,352 2,221
% change -2.2% -2.9% 1.6% -2.2% -3.0%
Q1-'12 16,943 5,253 1,368 8,166 2,156
Q1-'11 18,570 7,796 1,527 7,498 1,754
% change -8.8% -32.6% -10.4% 8.9% 22.9%

 

Great American joined the quarter’s top five companies for the first time, coming in fifth. Aviva USA moved up a notch and New York Life advanced two, to take second and third place, respectively. Allianz continued as sales leader, and American Equity remained a top-five company. First quarter results for the top five study participants were as follows:

 

Total Fixed Annuity Sales (in thousands)
Allianz Life 1,484,018
Aviva USA 1,177,884
New York Life 1,059,701
American Equity 979,421
Great American 773,849

 

Ranking companies were unchanged, in terms of sales by product type and distribution channel, from the prior quarter.

New York Life’s Lifetime Income Annuity is the first product of its type to be a quarterly bestseller.

Rank Company Name Product Name Product Type
1 New York Life NYL Lifetime Income Annuity Income
2 Allianze Life MasterDex X Indexed
3 Aviva Balanced Allocation Annuity 12 Indexed
4 American Equity Bonus Gold Indexed
5 Aviva Income Preferred Bonuse Indexed

 

“As carriers respond to the low rate environment, we expect to see more MVAs, unbundled product features and GLWB rollup rates that vary based on credited interest,” Alexander said.

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