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

BofA: Recession May Force Fed Rate Cut in 2023

A slowdown in rate hikes would tamp down 10-year Treasury yields and some of the volatility that has plagued investors this year, BofA says.

DOL Reverses Trump on ESG Investments in Retirement Plans

The rule makes it easier for plans to offer socially responsible investments, but traditional financial factors must be considered.

SEC Charges Goldman Didn’t Follow ESG Policies

The SEC fined Goldman Sachs Asset Management $4 million for not following ESG policies and procedures.

Hedge Fund Challenges Envestnet

The hedge fund has criticized the board for ballooning costs and authorizing rich paydays for management and board members.

Older investors Still Seeking Guidance From Advisors

A survey of investors 50 and over who consult advisors on wealth management shows what’s top of mind.

Cancer Diagnoses Lag After Screenings Fall During Pandemic

Although Americans are getting back to a normal way of life, they still appear to be avoiding the healthcare system, new research finds.