LIMRA: Fixed-rate deferred annuity sales lead to record-breaking 2Q

Total U.S. annuity sales increased 16% to $79.4 billion in the second quarter, according to LIMRA’s U.S. Individual Annuity Sales Survey.

Fixed-rate deferred (FRD) and registered index-linked (RILA) sales reached an all-time record for the quarter, while fixed index annuity sales fell just short of a record quarter.

“All fixed products showed positive growth as consumers looked for safety from the volatile equity markets,” said Todd Giesing, assistant vice president, LIMRA Annuity Research. “With average yields at or above 3% for fixed-rate deferred annuities, it’s a rate environment we haven’t seen in a long time.”

FRD sales led the way with a total of $28.7 billion in the second quarter, 79% higher than second quarter 2021 sales. In the first six months of 2022, fixed-rate deferred annuities totaled $44.6 billion, a 46% increase compared with the same period last year.

“Overall, banks and the full-service national broker dealers are driving this record-setting growth,” Giesing noted. “Second quarter overall annuity sales through banks grew 48% and sales through full-service national broker dealers were up 55% for the quarter.

“Independent broker dealers have not taken advantage of the rising rates and growth in FRDs,” Giesing added. “Overall sales by independent broker dealers were down 12% for the quarter.”

RILA sales saw the highest quarter ever in the second quarter, up 8% to $10.8 billion. In the first half of 2022, RILA sales were $20.4 billion, 6% higher than prior year. RILA sales now make up 40% of overall variable annuity sales.

FIA sales also had a strong quarter, with $19.7 billion in the second quarter, up 19% from second quarter 2021 and 20% year to date (YTD).

“When you look at the carriers that fared well in the quarter and in the first half of 2022, those with a diversified suite of annuity product offerings were most successful,” said Giesing.

Traditional variable annuity (VA) sales fell in the second quarter. VA sales dropped 27% to $16.5 billion in the second quarter, the lowest quarterly results since the fourth quarter of 1995. YTD sales are down 20%.

Single premium immediate annuities (SPIA) sales totaled $2 billion, up 25% from the first quarter. Year to date, SPIA sales were $3.5 billion, 13% higher than prior year. Deferred income annuities (DIA) sales grew 42% in the second quarter, to $520 million. In the first six months of the year, DIA sales totaled $890 million, 5% lower than prior year.

This report compiled by InsuranceNewsNet staff.