Total annuity sales improved 11 percent in the first quarter of 2014, compared to the first quarter of 2013, totaling
Annuity sales were driven largely by fixed annuity sales, which experienced a 43 percent increase in the first quarter, compared to prior year, reaching
"Despite recent declines in interest rates - falling from just over 3 percent at the end of 2013 to 2.7 percent at the end of the first quarter- we are still predicting approximately 10 percent growth for fixed annuities in 2014," said
Fixed-rate deferred annuities - Book Value and MVA - had another robust quarter, increasing 48 percent in the first quarter to reach
Indexed annuity sales rose 43 percent in the first quarter, totaling
First quarter indexed annuity sales through the bank and independent broker-dealer (IBD) channels reported significant growth. In the first quarter of 2013, IBDs represented just 3 percent of the indexed annuity market. As of first quarter 2014, IBDs represent 13 percent of the market. Banks also saw substantial growth from 10 percent of the market in first quarter 2013 to 16 percent in the first quarter of this year.
"The increases in the banks and IBD channel are encouraging because they represent organic growth" noted Giesing. "Traditionally, independent agents have represented most of the indexed annuity sales. Recent sales growth in the bank and IBD channels has not detracted from the independent agent channel, which increased 15 percent in the first quarter."
Indexed annuity guaranteed living benefits (GLBs) election rates were 68 percent (when available) in the first quarter.
Deferred income annuities (DIA) reached
Single premium immediate annuity sales improved 47 percent in the first quarter to reach
VA sales fell 3 percent in the first quarter, to
LIMRA SRI has noted a shift in the annuity market: In the first quarter of 2013, VA sales represented 68 percent of the total market share. A year later, VA sales only made up 59 percent of the total market.
Election rates for GLB riders were elected 79 percent (when available) in the first quarter. Increased focus on accumulation and tax deferral, as well as changes in GLB riders has impacted election rates of these riders.
The first 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. The 2014 top 20 rankings of total, variable and fixed annuity writers can be viewed at 2014 Top 20 Annuity Writers
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