Annuity sales are set to have another record-breaking year, based on results in the third quarter.
LIMRA release its Third Quarter 2023 U.S. Retail Annuity Sales Survey Nov. 30, which noted:
• Total U.S. annuity sales grew 10% to $88.6 billion in the third quarter. For the first nine months, sales were $269.6 billion, up 21% from the same period in 2022. LIMRA is forecasting sales to reach $350 billion for 2023, beating last year’s record by 10%.
• Total fixed annuity sales were $63 billion for the quarter and $196.1 billion for the first nine months, up 37% from the same period last year.
• Total variable annuity (VA) sales were $25.6 billion in the third quarter and $73.5 billion for the first nine months, down 8% from the first nine months of 2022.
The top five companies based on total U.S. individual annuity sales are Athene Annuity & Life, Corebridge Financial, Massachusetts Mutual Life, New York Life and Allianz Life of North America.
Fixed annuities
Among fixed annuities, the highest sales went to fixed-rate deferred annuities, which reached $34.4 billion, up 15% from third quarter 2022. For the first nine months, sales totaled $106.4 billion, up 43%.
On a percentage basis, deferred income annuities were the clear winner, jumping 88% for the quarter to $950 million and 104% to $2.8 billion for the first nine months.
Single premium immediate annuity (SPIA) sales were $2.9 billion in the third quarter, 16% higher than the prior year’s results. In the first nine months, SPIA sales jumped 62% to $9.7 billion.
“Income annuities will hit record levels in 2023, with sales in this category expected to exceed $16 billion for the year,” said Todd Giesing, assistant vice president, LIMRA Annuity Research, in a press release. “Falling interest rates early in 2024 will reduce sales of income annuities in 2024 (compared with 2023 record results), but we predict sales will be more than 40% higher than sales results in 2022.”
The five companies with the most sales of fixed annuities include Athene Annuity & Life, Massachusetts Mutual Life, New York Life, Corebridge Financial and Global Atlantic Financial Group.
Variable annuities
Although variable annuity (VA) sales were down overall, registered index-linked annuities (RILA) set a new sales record at $12.6 billion for the quarter, up 19%. For the first nine months, RILA sales were $34.4 billion, up 11% from the same period in 2022.
“Despite the slight decline in the S&P in the third quarter (down 3.3%), the market remains up more than 13% for the year with expectations of steady growth through 2024,” Giesing said. “Interest rates are expected to fall in early 2024, dampening demand for risk-free solutions, such as fixed-rate deferred and fixed indexed annuities. This shift in interest rates will benefit RILA sales as investors lean in on solutions that have greater upside potential while protecting against a possible downturn.”
Meanwhile, traditional VA sales in the third quarter, at $13 billion, were down 8%. For the first nine months, sales were $39.1 billion, down 20% from the first nine months of 2022. LIMRA expects sales will be down for the entire year, but is forecasting a 5% increase in 2024.
The five top companies in variable annuity sales are Jackson National Life, TIAA, Equitable Financial, Corebridge Financial and Nationwide.
