NEW YORK--(BUSINESS WIRE)-- The Depository Trust & Clearing Corporation (DTCC) Insurance & Retirement Services (I&RS) released today full-year and December information on activity in the market for annuity products from its award-winning Analytic Reporting for Annuities online information service, which leverages data from the transactions that DTCC processes for the industry. Analytic Reporting for Annuities is a service offering of National Securities Clearing Corporation, a DTCC subsidiary.
The charts for this release can be viewed at: http://www.dtcc.com/news/press/releases/2012/dec.pdf.
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Inflows processed by DTCC in 2011 totaled over $90 billion
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DTCC processed nearly 45 million transactions categorized as inflows and out flows in 2011
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Net flows in 2011 totaled almost $24 billion
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Inflows for all annuity types processed in December increased nearly 13%, or over $860 million, to $7.8 billion from $6.9 billion in November.
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Subtracting out flows from inflows, net cash flows decreased 2.5% to $1.84 billion in December from $1.9 billion in November.
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The top 10 insurance companies accounted for over 69% of all inflows processed in December and over 68% of all inflows processed in 2011.
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Five hundred sixty one (561) annuity products saw positive net flows in December, while 2,264 annuity products saw negative net flows, where the amount redeemed exceeded the amount invested.
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For the full year, 700 annuity products had positive net flows and 2,450 experienced negative net flows.
The overall trend in inflows has been slightly down for the year, while the trend in net flows has been slightly up.
Transactions processed by DTCC show an increasing percentage of inflows being directed into IRA accounts in 2011, and a decreasing percentage of inflows directed into non-qualified accounts. Non-qualified accounts are receiving less than 40% of cash flows. After remaining relatively flat for the past several months inflows into 401(k) plans jumped from $392 million in November to almost $749 million in December.
Looking at the net cash flow (subtracting out flows from inflows) distribution displays the greater persistence, or “stickiness,” of investments into qualified plan accounts. In 2011 regular IRA accounts took the lion’s share of positive net flows with 77%. 401k plans attracted 13%, and non-qualified accounts attracted only slightly less than 6% of positive net flows, far from the 39% of inflows going into these accounts.
DTCC-RIIA Agreement
In August 2011, DTCC joined forces with the Retirement Income Industry Association (RIIA) to analyze cash flows by RIIA-defined broker/dealer distribution channels and product categories. For the six distribution channels defined by RIIA, the following are the percentages of inflows processed by the I&RS in December:
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Independent broker/dealers – 25%
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Wirehouses – 23%
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Regional broker/dealers – 15%
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Bank broker/dealers – 12%
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Insurance broker/dealers – 9%
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Others – 16%
About DTCC
DTCC, through its subsidiaries, provides clearance, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, money market instruments and over-the-counter derivatives. In addition, DTCC is a leading processor of mutual funds and insurance transactions, linking funds and carriers with their distribution networks. DTCC's depository provides custody and asset servicing for more than 3.6 million securities issues from the United States and 121 other countries and territories, valued at US$36.5 trillion. In 2010, DTCC settled nearly US$1.66 quadrillion in securities transactions. DTCC has operating facilities and data centers in multiple locations in the United States and overseas. For more information, please visit www.dtcc.com.
About Analytic Reporting and I&RS
Analytic Reporting for Annuities is an award-winning online information solution containing aggregated data from transactions processed by the I&RS of DTCC. I&RS is the central messaging connection for annuity and life insurance transactions, enabling insurance companies to provide broker/dealers with daily financial transaction information. I&RS processes approximately 150 million transactions each month.
Because Analytic Reporting is based on processed transactions, not surveyed data, Analytic Reporting gives DTCC customers a unique and unprecedented view of their own business as well as the market for annuity products so that they can discover key trends and identify opportunities. With updates approximately two weeks after each month-end, Analytic Reporting allows users to assess their business and access industry intelligence to support management decisions about sales, sales management, marketing and product offerings. Analytic Reporting is a hosted turnkey solution, available online anywhere, anytime to DTCC customers. DTCC customers don't have to store or manage the data. They don't have to develop applications or run SQL queries to obtain the business information they rely on for decision-making.
See DTCC’s web site at http://www.dtcc.com/analytics for more information about the service.
The Depository Trust & Clearing Corporation
Crystal Bueno, 212-855-5473
clevy-bueno@dtcc.com
Source: The Depository Trust & Clearing Corporation
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