Sunday, June 13, 2021

Annuity Sales Up During Pandemic

Two categories were big winners.

As the COVID-19 pandemic peaked in the early part of 2021, investors sought safety in the security of annuities.

According to the Secure Retirement Institute (SRI), a research division of the industry trade group Life Insurance Marketing and Research Association (LIMRA), overall annuity sales for the first quarter were $61 billion, or up 9%, compared to the first quarter of 2020.

According to Todd Giesing, assistant vice president of SRI Annuity Research, the trend reflects consumers’ “uncertainty about the future,” prodding them to “protect not only their retirement savings, but also their nonqualified savings.”

Among the various types of annuities, investments in those emphasizing capital preservation and protection, as opposed to those emphasizing income, saw the biggest inflows. Sales of products emphasizing income features actually fell by 16% during the quarter, Giesing said in a press release.

Total fixed annuity sales were up 4%, to $31 billion, in the first quarter compared with the same period in 2020. But in that category, fixed-rate deferred annuity sales were the big winner with a 49% jump, rising to $14.6 billion. That sales number also represented the biggest dollar volume in the category. Meanwhile, sales of other kinds of fixed annuities were down by 10% or more. Structured settlement sales fell the most, by 33%.

Total variable annuity sales were up 15% to $30 billion. In that category, registered index-linked annuity sales shot up 88% to $9.2 billion, while traditional variable annuities were down 1%, to $20.9 billion.

“While SRI is forecasting sales growth to continue through 2025 as economic conditions improve, we expect growth of protection-based products to slow and income products to increase as we transition into the new normal in the U.S.,” Giesing said.

Latest news

Annuity Sales Up During Pandemic

Two categories were big winners.

The Five Best and Worst States for Health Care at 65+

A new analysis shows states with harsher winters tend to offer better quality health care for older adults. (By Michael LaPick)

74-Year-Old Scuba-Diving Advisor has No Plans to Retire

His adopted motto: “Run like hell and then drop dead.”

Advisors Leave Retirees Asset Rich, Advice Poor

A new report says advisors are missing out on revenue by not adequately serving retirees.