Sales of fixed and variable annuities were $60 billion in the second quarter of 2021, up 6% from first quarter 2021 sales of $56.7 billion, according to the Insured Retirement Institute (IRI), which today announced final second quarter 2021 market data for the U.S. annuity industry based on data reported by Beacon Annuity Solutions and Morningstar, Inc.
Total fixed annuity sales rose 12.1% to $30.8 billion, led by strong gains in traditional fixed and fixed indexed annuities, as compared to $27.5 billion in the first quarter of 2021. Variable annuities sales were almost flat, rising 0.2% to $29.23 billion from $29.17 billion in the first quarter.
Book value fixed annuity sales were responsible for the lion’s share of gains in the fixed category, rising 32% to $7 billion, while market value adjusted annuity sales fell 9.7% to $6.7 billion. Sales of fixed indexed annuities were solidly higher, growing 15.8% to reach $15.4 billion, and income annuity sales rose 17% from first quarter levels, reaching $1.8 billion for the second quarter.
Sales of variable annuities other than Registered Index-Linked Annuities (RILAs, which are structured variable products that use index options to provide both upside potential and downside protection) fell 4.8% to $19 billion from first quarter sales of $20 billion, while RILAs rose 11.2% to $10.2 billion from $9.2 billion in the first quarter of 2021.
In the fixed market, $15.6 billion of sales were in qualified plans and $15.2 billion were non-qualified. Variable annuities posted $17.9 billion in qualified sales and $11.3 billion in non-qualified.
According to Morningstar, variable annuity net assets were down 1.2% to end the second quarter at $2,079.8 billion versus $2,104.1 billion the first quarter. Equity funds, the second largest asset class, were up 2.4% over the first quarter, but 24.5% higher than the second quarter of 2020, reflecting the strong recover of equity market from the COVID-induced drop last year.
Net asset flows in variable annuities were -$18.5 billion in the second quarter, an improvement from the past two quarters when net asset flows were -$24 billion to -$25 billion.