First quarter 2017 sales of fixed indexed annuities (FIAs) dropped 14 percent to $12.9 billion compared with the year-ago period, a widely-followed industry data tracker reported Wednesday.
FIA sales dipped 3 percent compared with the fourth quarter 2016, according to Wink’s Market & Sales Report.
New Department of Labor fiduciary rules have weighed on sales as agents and distributors opt for a wait-and-see approach, according to industry analysts. The fiduciary rules are scheduled to take effect June 9, with full implementation Jan. 1, 2018.
“The Department of Labor’s fiduciary rule is imminent, and taking a toll on indexed annuity sales” exclaimed Sheryl J. Moore, president and CEO of both Moore Market Intelligence and Wink Inc., publisher of Wink's Market & Sales Report.
“Insurance distributors have been so busy preparing for the rule that they haven’t been able to focus on marketing products," she said. "Sales show it."
The numbers published Wednesday by Wink’s are in line with first-quarter annuity sales figures released last week by LIMRA Secure Retirement Institute.
Indexed annuity sales fell 13 percent to $13.6 billion in the first quarter compared with the year-ago period, LIMRA reported.
FIA sales traditionally tail off in the first quarter compared with the final quarter of the previous year, analysts also said.
Top-selling FIA issuers during the first quarter were Allianz Life, American Equity and Athene USA, Wink’s Sales & Market Report said.
The top-selling indexed annuity products were Allianz Life 222, Nationwide New Heights 12 and American Equity Bonus Gold.
The top-selling FIA in the independent channel was Allianz Life 222 Annuity, Wink’s said. Independent agents are responsible for nearly 60 percent of FIA sales.
MYGA Sales Take a Hit
First-quarter sales of multiyear guaranteed annuities (MYGAs), which offer a fixed rate over a period of several years, tumbled 17 percent to $9 billion, Wink’s reported.
MYGA sales rose 36 percent compared with the fourth quarter of 2016.
MYGAs are particularly sensitive to interest rate movements because these annuities come with longer maturities.
In March, the Federal Reserve raised a key benchmark lending rate by a quarter percent. The increase came on the heels of a quarter-percent increase in December.
Top MYGA sellers were New York Life, AIG and Global Atlantic Financial Group, the marketing name for Forethought Life.
The top-selling MYGA products in the first quarter were Forethought Life SecureFore 3 Fixed Annuity, Forethought Life SecureFore 5 Fixed Annuity and Security Benefit Life Rate Track 5-Year, Wink’s said. Fidelity & Guaranty Life’s FG Guarantee-Platinum 5 was the top selling MYGA in the independent agent channel.
Fixed Annuity Sales Slip
Fixed annuity sales in the first quarter dipped 6 percent to $1.1 billion over the year-ago period, Wink’s reported. Fixed annuity sales rose 6 percent over the fourth quarter,.
The top fixed annuity issuers in the first quarter were Jackson National, Modern Woodmen of America and Great American Insurance Group, Wink’s said. Jackson National was the top seller of fixed annuities in the independent agent channel.
EquiTrust Life’s ChoiceFour was the top-selling fixed annuity sold through independent agents.
First-quarter sales of indexed annuities, fixed annuities and MYGAs, taken together, dropped 15 percent to $23 billion compared with the year-ago quarter, Wink’s reported.
Sales figures do not include variable and income annuities.