Fixed Rate Deferred Annuity Sales Lead to Record Q2 – InsuranceNewsNet

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

Deferred fixed rate (FRD) and indexed registered (RILA) sales reached an all-time high in the quarter, while fixed index annuity sales fell just short of a record quarter.

“All fixed products posted positive growth as consumers sought safety from volatile stock markets,” said Todd Giesing, assistant vice president, LIMRA Annuity Research. “With average returns at or above 3% for fixed rate deferred annuities, this is 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 sales in the second quarter of 2021. In the first six months of 2022, fixed rate deferred annuities totaled $44.6 billion, an increase of 46% over the same period last year.

“Overall, domestic full-service banks and brokers are driving this record growth,” Giesing noted. “During the second quarter, overall annuity sales through banks increased 48% and sales through national full-service brokers increased 55% for the quarter.

“Independent brokers haven’t benefited from rising rates and growth in FRDs,” Giesing added. “Overall Independent Broker sales were down 12% for the quarter.”

RILA sales had 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, up 6% from the prior year. RILA sales now represent 40% of global variable annuity sales.

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

“When you look at insurers that did well in the quarter and first half of 2022, those with a diverse range of annuity product offerings performed the best,” Giesing said.

Sales of traditional variable annuities (VA) fell in the second quarter. VA sales fell 27% to $16.5 billion in the second quarter, the lowest quarterly results since the fourth quarter of 1995. Year-to-date sales are down 20%.

Single premium immediate annuity (SPIA) sales totaled $2 billion, up 25% from the first quarter. Year-to-date, SPIA’s sales were $3.5 billion, up 13% from the previous year. Sales of deferred income annuities (DIA) increased 42% in the second quarter to $520 million. In the first six months of the year, DIA’s sales totaled $890 million, down 5% from the previous year.

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