Top 5 Fixed Annuity Sellers

First quarter 2011 was kind to annuity providers, according to statistics from Beacon Research. According to its study, “Fixed Annuity Premium Study,” first-quarter 2011 fixed annuity sales posted their first month-to-month increase in two years, rising 6% to $18.9 billion. Book value annuities rose 12% to $8.6 billion; market value-adjusted products (MVAs) were up 7% to $1.4 billion; indexed annuity sales increased 0.2% to $7.1 billion; and income annuity results were rose 0.8% to $1.8 billion. 

First-quarter results for the top five study participants were as follows (total fixed annuity sales in thousands):

1. Western National Life—2,171,845

2. New York Life—1,894,090

3. Allianz Life—1,571,950

4. American Equity Investment Life Insurance Co.—1,341,832

5. Aviva USA—868,403

“Fixed rate annuities benefited from higher rates in first quarter,” says Jeremy Alexander, CEO of Beacon Research. “They had a strong rate advantage over CDs in many banks. The steep yield curve made longer term rates particularly attractive and sales moved longer as a result. Indexed annuities apparently lost sales to both fixed rate and variable annuities, while income annuities’ sequential decline was partly seasonal.”

On a quarter-to-quarter basis, book value sales rose 42%, while MVAs improved 7%. Indexed and income annuities were down 15% and 7%, respectively. Sales increased 7% in total.

American National was the new MVA sales leader. The other top companies by product type were unchanged: book value—Western National, indexed—Allianz and income—New York Life.

Three of these companies also posted top distribution channel sales. The leaders in the specific channels are:

Banks and S&Ls—Western National’s Flex 7 (Book Value)

Captive Agents—New York Life’s NYL Lifetime Income Annuity (Income)

Direct/Third Party—USAA’s Flexible Retirement Annuity (Book Value)

Independent Broker/Dealers—MassMutual’s RetireEase (Income )

Independent Producers—Allianz Life’s MasterDex X (Indexed)

Large/Regional Broker/Dealers—New York Life’s NYL Secure Term Fixed Annuity (Book Value)

Wirehouses—Nationwide’s BOA Platinum Edge (MVA)

Among the 550 products tracked by the study, three channel leaders had bestsellers for the quarter:

1. New York Life’s NYL Secure Term Fixed Annuity (Book Value)

2. Allianz Life’s MasterDex X (Indexed)

3. American Equity’s Retirement Gold (Indexed)

4. New York Life’s NYL Lifetime Income Annuity (Income)

5. Western National’s Flex 7 (Book Value) 

“Looking ahead, falling interest rates are likely to dampen fixed rate annuity sales in the near-term but may help indexed annuities,” Alexander says. “Income annuity results are likely to strengthen gradually due to growing demand for lifetime income and that will support indexed products with guaranteed lifetime withdrawal benefits as well.”