U.S. annuity sales in the first quarter of 2025 were down 1% from the record total notched during same period last year, according to LIMRA.
The first quarter total — $105.4 billion — was reported in LIMRA’s U.S. Individual Annuity Sales Survey, which covers 84% of the U.S. annuity market.
“For the sixth consecutive quarter, total annuity sales topped $100 billion, demonstrating the elevated interest in principal protection and guaranteed income continues,” Bryan Hodgens, LIMRA senior vice president and head of research, said in a news release. “Our latest Consumer Sentiment Survey shows Americans’ concern about the economy has risen sharply since January. This growing economic anxiety drove March sales results to be the second highest in history. LIMRA expects the current environment will likely attract more investors to registered indexed-linked and fixed-indexed annuities, which offer greater protected growth opportunity.”
Registered Index-Linked Annuities
Registered index-linked annuity (RILA) sales in the first quarter of 2025 jumped 21% year over year to $17.5 billion, continuing their outperformance of traditional variable annuity sales.
“Product innovation, new market entrants and expanded distribution have broadened the market capacity for these products,” Hodgens said. “Because these products are attractive to both insurers and investors, providing investors the ability to mitigate equity market downturns and allowing companies greater flexibility to hedge against risk as market conditions change. LIMRA is forecasting 2025 RILA sales to match or exceed the record-high sales set in 2024,” he said.
For the fifth consecutive quarter, sales of traditional variable annuities increased year over year despite increased market volatility. Traditional VA sales in the first quarter of 2025 were $15.6 billion, 14% more than the results for the first quarter of 2024.
Fixed-Rate Deferred
Fixed-rate deferred annuity (FRD) sales totaled $39.5 billion in the first quarter, down 8% from first quarter 2024.However, FRD annuities continue to be the primary driver of annuity sales growth, representing nearly 38% of the total annuity market in the first quarter, according to LIMRA.
“Although first quarter FRD sales were lower year-over-year, sales rebounded 35% from fourth quarter results, driven largely by March sales results,” Hodgens reported. “The average crediting rate for a three-year FRD product remains nearly 200 basis points above the average CD rate. For conservative investors who wish to avoid market volatility risk, these products continue to be an attractive option. LIMRA predicts — even with expected interest rate cuts — FRD sales will be above $120 billion in 2025.”
Fixed Indexed Annuities
Sales of fixed indexed annuity (FIA) were $26.7 billion in the first quarter of 2025, a 7% decline year over year. Although lower than record sales achieved throughout 2024, the first quarter 2025 results are the fifth highest in history.
Income Annuities
Sales of income annuities declined sharply despite interest rates remaining steady in the first quarter. Sales of single premium immediate annuity (SPIA) sales were $3, 17% below 2024 results. Deferred income annuity (DIA) sales in the first quarter fell 19% year over year to $950 million.
“While all fixed annuity product line sales dropped below the record first quarter sales in 2024, sales of these products remain higher than historical norms,” Hodgens noted. “LIMRA believes broader distribution, product innovation, and most importantly, greater investor awareness and interest in the investment protection fixed annuities offer, will keep fixed annuity product sales strong through 2025.”
The results for the first quarter 2025 annuity industry are preliminary estimates based on monthly reporting. A summary of the results can be found in LIMRA’s Fact Tank.
