A Look Behind 3Q Annuity Sales Numbers
December 6, 2016 by Cyril Tuohy
Investors prefer indexed annuity products over fixed annuities weighed down by low-interest rates. This was a major factor in third-quarter fixed indexed annuity (FIA) sales rising 3 percent to $14.3 billion compared to the year-ago period, according to new market data released Thursday.
“Indexed annuities are on record pace for 2016,” said Sheryl J. Moore. “I project sales to hit $60 billion for the year.” Moore is president and CEO of Moore Market Intelligence and Wink Inc., publisher of Wink’s Sales & Market Report., which tracks life and annuity sales.
FIA sales hit a record $53 billion last year. Two separate reporting agencies have projected FIA sales to reach the $60 billion range in 2016.
Allianz Life retained the crown as the top-selling FIA carrier with a third-quarter market share of 17.1 percent. Allianz 222 was the No. 1 selling indexed annuity for the ninth consecutive quarter, according to Wink.
Athene USA rose to the No. 2 spot followed by American Equity, AIG and Great American Insurance.
Third-quarter FIA sales dropped nearly 8 percent compared with the second quarter, Wink reported.
Wink: 3Q Fixed Annuity Sales Slump
Low-interest rates continue to drive investors away from fixed annuity products and into indexed products as consumers look for higher yields. The Standard & Poor’s 500 index ended November up 7.6 percent.
Third-quarter sales of fixed annuities, however, slumped by nearly 59 percent to $1.2 billion compared with the year-ago period, Wink reported.
[Jackson National] was the No. 1 fixed annuity insurer in the third quarter. [Jackson National] was followed by Reliance Standard, Great American Insurance and MetLife.
Moore said that while fixed annuity sales have been “sluggish,” sales of multiyear guaranteed annuities, one of several fixed annuity product categories, are doing “fairly well.”
“Banks are driving sales of these products because rates on competing products, such as certificates of deposit, are still hovering at less than 1 percent,” Moore said in a news release. “This is driving sales of these CD-like annuities.”
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