Variable annuity sales, after falling 26% in the first six months of last year, perked up enough to erase some of those losses for the entire year, LIMRA reported.
Meanwhile, indexed annuities showed record gains, increasing 9% from the prior year, sparked in large part by a strong second quarter. For the year, $24.9 billion in indexed annuities were sold in 2009.
While indexed annuities were the bright spot, variable annuity sales, which dropped 18% for the year, never recovered from the bad first quarter, which reflected the effects of the recession, LIMRA officials said.
“The last time VA sales were at this level was in 2003, at the end of the last financial crisis,” said Joe Montminy, assistant vice president and research director for LIMRA’s annuity research. “VA sales experienced significant losses from the third quarter of 2008 through first quarter 2009 and while we are seeing VAs slowly recover, the recovery is slower than expected.”
Sales improved slightly in the fourth quarter as compared to the third quarter, up 3%, to $32.6 billion. However, those results were 3% lower than the fourth quarter of 2008.
Overall individual annuity sales fell in the fourth quarter, down 2% as compared the prior quarter, to reach $53.3 billion. The figure marks a 22% decline from the fourth quarter of 2008. Total individual annuity sales declined 11% in 2009, to $234.9 billion.
Fixed annuity sales continued to fall in the fourth quarter, down 10% from the third quarter and 40% from the fourth quarter in 2008, which showed strong gains, LIMRA reported. Fixed annuity sales totaled $20.7 billion in the fourth quarter and $107.9 billion for the year, which was a 1% decline from 2008.
Indexed annuity sales can’t overcome variable, fixed annuity declines via IFAwebnews.com .
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