Fixed annuity sales were behind record results in 2022 for the annuity industry.
Total annuity sales surged to $310.6 billion last year, a 22% increase from 2021 results and 17% higher than the record set in 2008, according to preliminary results from LIMRA’s U.S. Individual Annuity Sales Survey.
“Investors seeking guaranteed growth and downside protection drove extraordinary fixed annuity sales of $208 billion, 49% above the record set in 2019,” said Todd Giesing, assistant vice president, LIMRA Annuity Research, in a press release. “Fluctuating interest rates in the fourth quarter prompted investors to lock in crediting and payout rates while they were high. Our forecast suggests that protection products will continue to boost growth in the annuity market for the next several years.”
In the fourth quarter, total annuity sales were $87.2 billion, a 39% increase from a year earlier. The results mark the third consecutive quarter in which annuity sales set a new record, the survey said.
The report noted the performance of other annuity products varied:
Fixed indexed annuity sales in the fourth quarter were $21.9 billion, a 32% increase from prior year. For the year, FIA sales were $79.4 billion, up 25% from 2021, and 8% higher than the record set in 2019.
Registered index-linked annuity sales were $9.9 billion in the fourth quarter, down 4% from the fourth quarter last year. Despite lower fourth-quarter results, total RILA sales reached $40.9 billion in 2022, 6% higher than prior year and a new all-time high for the product line’s sales.
Traditional variable annuity sales continued to falter. In the fourth quarter, traditional VA sales fell 42% to $12.6 billion. In 2022, traditional VA sales totaled $61.7 billion, down 29% from 2021 results. Annual traditional VA sales peaked at $184 billion in 2007. “Given the current economic forecast and competitive pressures, there is little expectation that sales will improve significantly over the next several years,” the report said.
Single-premium immediate annuity sales were $3.1 billion in the fourth quarter, a year-over-year increase of 94%. In 2022, SPIA sales were $9.1 billion, 44% higher than 2021 results.
In the fourth quarter, deferred income annuity (DIA) sales rose 59% to $720 million. For the year, DIA sales were $2.1 billion, up 24%. LIMRA forecasts income annuity sales to experience steady growth through 2026.
