Morningstar: 4Q VA Sales Drop 6.1%

By Cyril Tuohy InsuranceNewsNet

Fourth-quarter new sales of variable annuities (VAs) dropped 6.1 percent to $33.06 billion from $35.2 billion in the year-ago period. Jackson National retained the top spot, according to data by Morningstar.

The Morningstar data track sales of the top 35 VA sellers nationwide.

Jackson National led the pack with $4.65 billion in fourth-quarter new sales, a drop of $820 million from $5.47 billion sold in the year-ago period.

Lincoln Financial Group came in second with $3.29 billion in new sales, TIAA-CREF was next with $3.12 billion, SunAmerica/VALIC was fourth with $3.10 billion and AEGON/Transamerica was fifth with $2.76 billion, Morningstar reported.

The data show that of the top five sellers, only AEGON/Transamerica had higher new sales in the fourth quarter compared with the year-ago period. The company moved up two notches to fifth place last year from seventh place in 2013.

Second-place Lincoln moved up one notch compared with a year ago, trading places with TIAA-CREFF, the data show.

Jackson National’s market share slid to 14.1 percent from 15.5 percent in the fourth quarter 2013. In the fourth quarter, sales from Jackson and Lincoln commanded a market share of 24.1 percent.

Morningstar expects to release full-year VA sales shortly.

Earlier in March, LIMRA reported fourth-quarter VA sales reaching $34.2 billion, a 6 percent drop compared with the year-ago period.

VA sales in 2014 dropped 4 percent to $140.1 billion compared with 2013, LIMRA also reported, adding that VA sales last year were the lowest since 2009.

Topping LIMRA’s VA league tables was Jackson National followed by Lincoln Financial Group, American International Group, TIAA-CREF and Transamerica.

The slight drop in VA sales was offset by the growth in fixed annuities, which last year saw sales rise 13 percent to $95.7 billion, LIMRA said. Sales of variable and fixed annuities reached $235.8 billion last year, an increase of 3 percent over 2013.</p>

Todd Giesling, senior business analyst for LIMRA Secure Retirement Institute, said in a news release that sales of index and income annuities hit record levels in 2014, a year when interest rates fell by nearly 1 percentage point and the Standard & Poor's 500 index surged 11 percent.

The performance of index and income annuities in particular “propelled overall annuity sales to increase in 2014,” he said.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].

Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].