U.S. annuity sales passed a new milestone in 2024, with totals exceeding $100 billion in all four quarters, LIMRA reports.
Annuity sales totaled $434.1 billion in 2024, a 13% increase from 2023, according to LIMRA’s U.S. Individual Annuity Sales Survey. Annuity sales have achieved records in the past three years, for a total of $1.1 trillion, according to the survey, which represents 92% of the U.S. annuity market.
U.S. annuity sales in the fourth quarter of 2024 were down 12%, or $102.1 billion, from the record total of the fourth quarter of 2023. LIMRA attributed the decline to interest rate reductions, which adversely affected sales of fixed-rate deferred (FRD) annuities and income annuities.
“This was a remarkable year for the U.S. annuity market with nearly 80% of participating carriers reporting positive growth,” Bryan Hodgens, senior vice president and head of LIMRA research, said in a news release. “Favorable economic conditions and growing investor awareness about the protections and guarantees that annuities offer propelled the broad growth. The past few years have transformed the annuity market. Although we don’t expect sales at the levels seen the past two years, LIMRA predicts total annuity sales to be well above $350 billion in 2025 and remain above $300 billion through 2027.”
Registered Index-Linked Annuities
Registered index-linked annuity (RILA) sales increased 36% to $17.7 billion year, year over year from the fourth quarter of 2023. RILA sales totaled $65.6 billion in 2024, a 38% increase from 2023. It’s the 10th consecutive record year for RILA sales and the first time RILA sales exceeded traditional variable annuity sales.
“Driven by greater competition and continuous product innovation, RILA sales have exploded over the past decade — from $3.7 billion in 2015 to $65.6 billion in 2024,” said Hodgens. “Given the current market uncertainty, RILA products have carved out a nice place along the product risk spectrum, positioned between traditional variable annuities and fixed index annuities. LIMRA is forecasting sales to remain at or slightly above the sales in 2024.”
Traditional Variable Annuities
Traditional variable annuity (VA) sales saw growth for the first time in three years during 2024. In the fourth quarter, traditional VA sales were 36% above the results from the fourth quarter of 2023, reaching $16.7 billion. Traditional VA sales totaled $60.0 billion in 2024, up 18% from the previous year.
Fixed Indexed Annuities
Fixed indexed annuities sales cooled at the end of 2024, reaching $31.8 billion in the fourth quarter, 10% below the third quarter’s record sales. However, that was still 28% above the rear-over-year results. In 2024, FIA sales increased 32% to $126.9 billion. Among the top 20 FIA carriers, three-quarters experienced or exceeded double-digit growth in 2024, the third consecutive year of record FIA sales. LIMRA predicted that lower interest rates could diminish demand for FIA products this year but said FIA sales will likely remain above $100 billion.
Fixed-Rate Deferred
FRD annuity sales fell year over year for four consecutive quarters. FRD sales totaled $29.2 billion in the fourth quarter, down 50% from the record set in the fourth quarter of 2023. For the year, FRD sales declined 7% to $153.2 billion.
“The fourth quarter marked the lowest FRD sales in 10 quarters,” Hodgens said. “Despite expected additional interest rate cuts, LIMRA expects FRD annuity sales to remain above $120 billion in 2025, double the sales recorded before 2022.”
Income Annuities
Single premium income annuity sales declined 13% year over year in the fourth quarter for a total of $3.1 billion. For all of 2024, SPIA sales increased 2% to $13.6 billion, a new record.
Deferred income annuity sales decreased 13% year over year to $1.2 billion in the fourth quarter of 2024. For 2024, DIA sales were up 19% to a record $4.9 billion.
