U.S. annuity sales started 2025 at the same strong pace they began 2024 with, according to LIMRA.
First quarter 2005 sales were $106.3 billion, even with the record set in the first quarter of 2024, according to LIMRA’s quarterly U.S. Individual Annuity Sales Survey, which covers 85% of the total U.S. annuity market.
“Total annuity sales topped $100 billion for the sixth straight quarter, demonstrating the growing interest in principal protection and guaranteed income continues,” Bryan Hodgens, senior vice president and head of LIMRA research, said in a news release.
However, Hodgens said too few consumers and advisors are familiar with annuities and how they can help individuals achieve financial security in retirement. He noted that LIMRA, along with sister organization LOMA, is bringing the Alliance for Lifetime Income “under its umbrella” to increase awareness about the value of annuities and protected income solutions. The organizations seek to target “the entire value chain, including consumers, financial advisors, and other external audiences, Hodgens said. “The integration strengthens LIMRA and LOMA’s role in shaping the retirement security conversation and influencing consumer perceptions and industry strategies,” he said.
LIMRA offered this summary of annuity sales in the first quarter:
Sales of registered index-linked annuities (RILA) increased 20% year over year to $17.4 billion. Of the top 20 RILA carriers, about 75% reported growth in the first quarter.
“We continue to see new companies enter the RILA market, driving product innovation and expanding distribution,” LIMRA assistant vice president and annuity research director Keith Golembiewski said in the release.
Indexed products – both RILAs and fixed indexed annuities – accounted for 42% of total annuity sales in the first quarter, Golembiewski said, noting that sales of indexed products accounted less than 30% of total sales 10 years ago.
“Today’s investors have to balance the concerns of economic uncertainty with the need for greater upside investment growth potential. RILAs and FIA offer that balanced value proposition,” he said.
Traditional Variable Annuities
Traditional variable annuity sales rose year over year for the fifth consecutive quarter. Traditional VA sales were $15.3 billion, a 12% increase from first quarter 2024 results. Nine out of 10 of the top 20 VA carriers and two-thirds of all VA carriers reported first quarter gains.
“LIMRA research shows fee-based VA sales grew 21% in the first quarter, compared with prior year results,” Golembiewski said. “While this growth includes, in small part, fee-based RILA sales, we believe the resurgence of traditional VA sales over the past five quarters likely is related to the ongoing efforts to expand distribution to the registered investment advisor channel.”
Fixed-Rate Deferred
First quarter 2025 total fixed-rate deferred annuity (FRD) sales were $39.7 billion, up 36% from fourth quarter 2024, but down 8% from first quarter 2024 sales. Despite the year-over-year decline, FRD annuities continued to be the chief driver of annuity sales growth, accounting for almost 38% of the annuity market in the first quarter.
“Market volatility in the later part of the quarter caused FRD sales to spike in March as investors sought protection and guaranteed growth amid market uncertainty,” Golembiewski explained. “The average crediting rate for a three-year FRD products remained nearly 200 basis points above the average CD rate. With persistent inflation delaying any potential interest rate cut by the Federal Reserve, LIMRA expects FRD sales will be above $120 billion in 2025.”
Fixed Indexed Annuities
Sales of fixed indexed annuities (FIA) were down 3% year over year to $27.8 billion in the first quarter of 2025. Despite that decline, more than 50% of the top 20 FIA carriers experienced increased sales in the quarter.
Income Annuities
Income annuity sales experienced a sales decline in the first quarter. Sales of single premium immediate annuities (SPIA) totaled $3 billion in the first quarter, a 16% decline compared with 2024 results. Deferred income annuity (DIA) sales fell 22% year over year to $900 million in the first quarter.
“Our research shows just among pre-retirees who don’t own an annuity, only 44% expect to have enough income from lifetime guaranteed income sources (i.e., Social Security or private pensions) to cover basic living expenses,” Hodgens said. “Our industry needs to do a better job of explaining how annuities can provide that guaranteed income and offer financial peace of mind.”
For more details on the sales results, visit: Annuity Sales Estimates (First Quarter 2025) in LIMRA’s Fact Tank.
