Total annuity sales hit
For full year 2013, annuity sales were
Fourth quarter sales of indexed annuities reached
"There were several reasons indexed annuities has such a strong fourth quarter," said
Indexed annuity sales were up 16 percent in 2013 compared to 2012 and totaled
Fixed annuity sales were
Fixed-rate deferred annuities - Book Value and MVA- had another outstanding quarter, increasing 54 percent in the fourth quarter compared to last year. The improved interest rate environment was the main reason for this substantial increase. Fixed-rate annuity sales reached
Variable annuity sales marked positive growth in the fourth quarter, up 4 percent to
Companies continue to carefully manage their VA business. More emphasis on accumulation VA's appears to be an emerging trend. In 2013, more companies introduced these types of products into their portfolios as they shift their focus to tax-deferred products with alternative investment options and indexed-linked VAs.
The growth in the equity markets enabled VA assets to hit a record
Election rates for VA GLB riders dropped to 79 percent (when available) in the fourth quarter. Focus on accumulation and tax deferment, as well as changes in GLB riders, has impacted election rates of these riders.
While GLBs can provide lifetime income, demand for pure income annuity products are at record levels -- deferred income annuities and SPIAs both broke sales records this quarter.
Deferred income annuities (DIAs) reached
Single premium immediate annuity sales were up 30 percent in the fourth quarter to reach a record
"Higher interest rates are playing an important role in the increased sales of income annuity products. We anticipate that continued improvements in interest rates and changing demographics will increase demand for these income annuity products ," noted Montminy. "There are 42 million retirees in the U.S. today, which will grow to 65 million by 2025. In addition, more and more Americans are going to retire without a pension and will look to create a guaranteed income stream, which annuity products can provide."
The fourth quarter Annuities Industry Estimates can be found in the updated Data Bank. To view variable, fixed and total annuity sales over the past 10 years, please visit Annuity Sales 2004-2013. Top twenty rankings of total, variable and fixed annuity writers will be posted in mid-March following the last company's earnings call.
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