Fixed indexed and registered index-linked annuity sales hit new records in the third quarter of 2024, leading continued substantial growth in the overall U.S. annuity market.
In the third quarter, annuity sales rose 30% year over year to $114.7 billion according to U.S. Individual Annuity Sales Survey by LIMRA. The data represents 92% of the total market, according to a LIMRA news release. Annuity sales surged 23% in the first nine months of 2024, reaching $332 billion.
“This was a strong quarter for U.S. individual annuity sales,” said Bryan Hodgens, senior vice president and head of LIMRA research. “All product lines posted double-digit increases, and overall sales were less than 1% lower than the record-high sales set in fourth quarter 2023. While interest rates have declined, heightened market uncertainty will likely continue to draw investors seeking principal protection and guaranteed growth. LIMRA expects annuity sales to set a new record in 2024.”
Sales of fixed indexed and registered index-linked annuities, which led the surge, represent 45% of U.S. annuity sales.
Fixed Indexed Annuity Sales
FIA sales set a record for a third consecutive quarter, hitting $35.2 billion in the third quarter, up 56% from 2023. Year-to-date sales were up 34%, reaching $95.1 billion. “Strong equity market performance and a desire for principal protection continue to attract investor interest in FIA products,” Hodgens commented. “To remain competitive, carriers are refining their indices and introducing more lucrative crediting options.”
RILA sales totaled $17 billion in the third quarter – a sixth consecutive quarterly record – growing 35% from the prior year. YTD, RILA sales increased 39% to $47.9 billion. “In the first nine months of 2024, RILA sales surpassed the total RILA sales collected in 2023” ($47.9 billion vs. $47.4 billion), Hodgens said. “LIMRA expects RILA sales to remain strong through 2025.”
Fixed-Rate Deferred Annuity Sales
Fixed-rate deferred (FRD) annuity sales in third quarter 2024 increased 17% from third quarter 2023 results, to $40.3 billion. In the first nine months of 2024, FRD sales were $124 billion, an increase of 17% year over year. “While FRD sales growth remained strong through the third quarter, our October preliminary figures suggest sales are beginning to soften in the face of repeated interest rate cuts,” said Hodgens, referring to reductions in September and November. “That said, FRD contracts still offer higher yields when compared with other short-term investments. If market volatility increases, LIMRA expects there will continue to be an increased demand for FRDs with clients seeking principal protection.”
Income Annuity Sales
Single premium immediate annuity (SPIA) sales increased to $3.5 billion in the third quarter, up 20% over the prior year’s results. SPIA sales increased 8% to $10.5 billion In the first nine months of 2024.
Third quarter deferred income annuity (DIA) sales were 41% higher year of year, reaching $1.3 billion. DIA sales grew 33% to $3.8 billion in the first nine months of of 2024.
Traditional Variable Annuity Sales
Traditional variable annuity year-over-year sales growth for a third consecutive quarter. Traditional VA tallied $15.1 billion in sales in the third quarter, an increase of 16% over third quarter 2023 results. Year to date, sales of traditional Vas were up 13% to $44.2 billion.
