Indexed annuities are the bright spot, growing in sales while the economy continues to slow other annuity sales, according to a new LIMRA analysis.
Overall annuity sales in the second quarter fell 4% from the first quarter and 8% from the second quarter one year ago, according to LIMRA. The analysis of 95% of the market found that second quarter 2012 annuity sales were $57 billion.
“The current economic conditions remain challenging for most insurers, driving overall annuity sales down,” said Joseph Montminy, assistant vice president of LIMRA annuity research.
Indexed annuity sales, which Montminy said are on track to set a sales record, rose 6% in the second quarter compared to the same quarter last year, hitting $8.6 billion. For the first half of the year, indexed annuities jumped 10%, compared to the first six months of 2011.
For the fourth consecutive quarter, indexed annuities outperformed traditional fixed annuities, capturing 47% of the fixed annuity market.
Indexed annuity sales are benefiting from the guaranteed lifetime withdrawal benefit (GLWB) riders being offered, LIMRA officials said. Exactly 87% of indexed annuity sales offered a GLWB in the second quarter, with 71% electing a GLWB rider.
Overall annuity sales in the first half of this year, hitting $111.8 billion, marks an 8% drop from the first half of 2011.
Variable annuity sales dropped 5% in the second quarter compared to the second quarter 2011. VA sales were 5% better than the first quarter of this year. VA sales equaled $38.6 billion in the second quarter and recorded $75.4 billion for the first six months of this year.
Total fixed annuities in the second quarter dropped 14%, to $18.4 billion, compared to the same quarter one year ago. For the first half of this year, fixed annuity sales were down 12% , to $36.4 billion.
Fixed immediate annuity sales also dropped, falling 14% in the second quarter compared to the same period in 2011. Sales totaled $1.9 billion for the quarter and $3.7 billion at the mid-year mark.
Book-value sales plunged 34% in the second quarter, resulting in a 33% decline for the first half of this year. Book-value sales totaled $5.5 billion in the second quarter, to reach $11.3 billion for the first six months of the year.
MVA sales in the second quarter totaled $1.2 billion, falling 14%. In the first half of the year, MVA sales were $2.5 billion, down 11% compared to prior year.
Indexed annuities are bright spot among flagging overall annuity sales via IFAwebnews.com .
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