Beacon: Income, Indexed Annuity Sales Increase In 3Q

November 30, 2011


EVANSTON, Ill., Nov. 30, 2011 (GLOBE NEWSWIRE) -- Third quarter 2011 income and indexed annuity sales topped the year-ago quarter according to estimates from the Beacon ResearchFixed Annuity Premium Study. Income annuities advanced 5% to $2.2 billion, and indexed annuities inched up 0.4% to $9.0 billion. Indexed annuity sales were also up 7% from second quarter, while year-to-date income annuity results increased 3% to $6.3 billion.

"As we anticipated, these products continued to do well -- despite the quarter's low interest rate environment -- because of strong demand for guaranteed lifetime retirement income, be it the personal pension provided by income annuities or the lifetime withdrawal benefits offered by most indexed annuities," said Jeremy Alexander, CEO of Beacon Research.

Year-to-date 2011 sales fell 1% to $58.3 billion. Aside from the income annuity increase, there were small declines in indexed annuities (down 1% to $24.6 billion) and fixed rate non-MVAs1 (down 1% to $23.2 billion). Fixed rate MVA results dropped 15% to $4.2 billion.

Fixed annuity sales were $19.0 billion in third quarter, 7% below results in both the year-ago and prior quarters. Lower interest rates dampened sales of fixed rate annuities. Non-MVA sales of $6.5 billion fell 14% from a year ago and 21% from second quarter. MVAs posted $1.3 billion in sales, down 33% from third quarter 2010 and 15% from the prior quarter. Income annuity results declined 2% sequentially.

Estimated Sales by Product Type (in $ millions)
  Total Fixed Rate
Fixed Rate
Indexed Income
YTD 2011 58,300 23,213 4,235 24,578 6,260
YTD 2010 58,780 22,990 4,990 24,729 6,069
% change -0.8% 1.0% -15.1% -0.6% 3.2%
Q3 '11 18,980 6,457 1,282 9,008 2,226
Q3 '10 20,490 7,471 1,927 8,972 2,111
% change -7.4% -13.6% -33.4% 0.4% 5.4%
Q3 '11 18,980 6,457 1,282 9,008 2,226
Q2 '11 20,410 8,178 1,506 8,438 2,280
% change -7.0% -21.0% -14.9% 6.8% -2.4%

Each of third quarter's top five companies changed position from the prior quarter. Allianz regained sales leadership, moving Western National to second place. Both American Equity and Aviva moved up a notch to come in third and fourth, respectively. New York Life took fifth place. Third quarter results for the top five Study participants were as follows:

  Total Fixed Annuity Sales (in thousands)
Allianz Life 1,614,004
Western National Life 1,342,074
American Equity 1,267,361
Aviva USA 1,259,723
New York Life 922,021

Pacific Life was the new MVA sales leader. The other top companies in sales by product type were unchanged from the prior quarter: indexed – Allianz, fixed rate non-MVA – Western National, and; income – New York Life.

MassMutual took the lead in sales through independent broker-dealers. The other distribution channel leaders were unchanged. Western National was the leading bank channel carrier. New York Life led in captive agent and large/regional broker-dealer sales. USAA was the dominant direct/third party channel company. Allianz posted top independent producer sales. Pacific Life remained leader in wirehouses.

Each of third quarter's top five products were indexed annuities except for New York Life's Lifetime Income Annuity, which moved up one place to come in second. The Allianz MasterDex X remained the leading product. American Equity's Retirement Gold jumped two notches to come in third, followed by the company's Bonus Gold. Aviva rejoined the top five with Balanced Allocation Annuity 12 taking fifth place. The Study tracks the sales of some 600 fixed annuities.

Rank Company Name Product Name Product Type
1 Allianz Life MasterDex X Indexed
2 New York Life NYL Lifetime Income Annuity Income
3 American Equity Retirement Gold Indexed
4 American Equity Bonus Gold Indexed
5 Aviva Balanced Allocation Annuity 12 Indexed

"We expect fourth quarter sales to decline due to seasonality as well as the difficult interest rate environment," Alexander concluded. "Beyond that, results aren't likely to improve much until rates rise. But, as always, a lot will depend on the decisions of the companies that issue and distribute fixed annuities."

About the Beacon ResearchFixed Annuity Premium Study

The quarterly Study is the first and only source to track and analyze product-level fixed annuity sales on an ongoing basis. Providing timely market intelligence of the highest quality, it's designed to report what's moving in each channel and why

About Beacon Research

Beacon Research tracks fixed, indexed and variable annuity sales, rates and features, and provides web-based systems at for distributors and insurance companies. Beacon also licenses information and software tools to other platforms, including EbixExchange's AnnuityNet annuity automation platform. Beacon's fixed annuity benchmark series -- the industry's first - is available through Ibbotson Associates. Directly and through strategic alliances, Beacon information can be accessed by hundreds of financial institutions and distributors.

The Beacon Research logo is available at

1 MVAs or market value adjustments pay a premium on withdrawals when interest rates fall and reduce withdrawals when rates rise. Fixed rate non-MVAs are also known as book value annuities.

CONTACT: Judith Alexander
         mailto:[email protected]

Beacon Research

Source: Beacon Research

Copyright:  2011 GlobeNewswire, Inc.
Wordcount:  827


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