VA Sales on Pace to Exceed $150 Billion for 2011 / Indexed Capture Nearly Half of Fixed Market
WASHINGTON, D.C. – The Insured Retirement Institute (IRI) today announced preliminary third quarter results for the United States annuity industry. Annuity sales for the third quarter continue to increase, outpacing levels from the same time period last year. Third quarter industry wide sales were $57 billion, up 5 percent from third quarter 2010 sales of $54.8 billion. Compared to second quarter sales of $60.3 billion, third quarter sales were down 6 percent.
“As annuity sales continue to outpace the impressive benchmarks established last year, this year is truly poised to be a historic one for the industry,” said IRI President and CEO Cathy Weatherford. “With variable annuity sales growing this quarter by more than $2 billion, and fixed annuities maintaining a strong footing in the market, it is evident that risk adverse investors are turning to these guarantees now more than ever. With this in mind, it is likely that 2011 will be the turning point for the industry, with sales reaching pre-crisis levels.”
Fixed annuity sales for the third quarter were $17.9 billion, down from $20.4 billion in the previous quarter, representing a 12.3 percent decrease. Year-to-year quarterly sales of fixed annuities were down 12.7 percent, with the third quarter of 2010 coming in at $20.5 billion. Year-to-date fixed annuity sales were $57.2 billion, 2.7 percent below $58.8 billion in 2010.
“Despite record-low interest rates, year-to-date fixed annuity sales have held up quite well,” said Beacon Research President Jeremy Alexander. “The ongoing demand for guaranteed lifetime retirement income is evident in the year-to-date growth of income annuity sales. This demand also drove the sequential increase for indexed annuities, most of which offer lifetime income features.”
Variable annuity sales for the third quarter were $39.1 billion, down 2 percent from $39.9 billion in the previous quarter. Year-to-year quarterly sales of variable annuities posted a 14 percent increase from third quarter 2010 sales of $34.3 billion. Year-to-date variable annuity sales were $118.1 billion, 17 percent above $100.7 billion in 2010.
“Up significantly from year-ago levels, third quarter variable annuity sales of $39.1 billion put the industry on track this year to exceed $150 billion in sales for the first time since 2008,”said Morningstar Director of Insurance Solutions Frank O’Connor.
For the complete preliminary data reporting, please access the PDF listed below. Reporting of additional annuity data from the third quarter will be available later this month.
About the Insured Retirement Institute: The Insured Retirement Institute (IRI) is a not-for-profit organization that for twenty years has been a mainstay of service, commitment and collaboration within the insured retirement industry. Today, IRI is considered to be the authoritative source of all things pertaining to annuities, insured retirement strategies and retirement planning. IRI proudly leads a national consumer education coalition of nearly twenty organizations and is the only association that represents the entire supply chain of insured retirement strategies: our members are the major insurers, asset managers, broker dealers and more than 75,000 financial professionals. IRI exists to vigorously promote consumer confidence in the value and viability of insured retirement strategies, bringing together the interests of the industry, financial advisors and consumers under one umbrella. IRI’s mission is t encourage industry adherence to highest ethical principles; promote better understanding of the insured retirement value proposition; develop and promote best practice standards to improve value delivery; and to advocate before public policy makers on critical issues affecting insured retirement strategies and the consumers that rely on their guarantees. Visit www.IRIonline.org today to experience the vast resources of the Insured Retirement Institute for yourself.
About Beacon Research: Beacon Research is an independent research company and application service provider founded in 1997 and based in Evanston, IL. Beacon tracks fixed and variable annuity features, rates and sales. Its quarterly Fixed Annuity Premium Study is the first and only source to analyze fixed annuity sales at the product level. Beacon lowers compliance risk and increases fixed annuity sales with 100% carrier-approved, comprehensive product profiles, spreadsheets and search tools for the advisor/rep websites of banks, TPMs, broker-dealers and marketing organizations. Financial institutions use its systems at www.annuitynexus.com for compliance review of 1035 exchanges, sales support, conservation and product research. Beacon also licenses information to other platforms, including Insurance Technologies’ VisibleChoice™ annuity sales platform, Ebix, Lipper, and Ibbotson Associates. Directly and through strategic alliances, Beacon information can be accessed by hundreds of financial institutions and thousands of advisors.
About Morningstar, Inc.: Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of Internet, software, and print-based products and services for individuals, financial advisors, and institutions. Morningstar provides data on approximately 350,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 4 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. The company has operations in 20 countries and minority ownership positions in companies based in two other countries.