Indexed Annuities Set New Quarterly, Year-to-Date Sales Records in Third Quarter 2013

Beacon Research

EVANSTON, Ill., Dec. 9, 2013 (GLOBE NEWSWIRE) -- The fixed annuity industry experienced one of its strongest periods of sales growth during third quarter 2013, according to the Beacon Research Fixed Annuity Premium Study. Indexed and deferred income annuities (DIAs) results hit record highs and sales of market-value-adjusted (MVA) annuities for the first three quarters of 2013 matched the total for all of 2012. Increases in credit spreads and long-term Treasury rates during the quarter helped to propel sales.

"Quarter-over-quarter sales were up among all fixed annuity product types and, for the first time since 2008, in all major distribution channels," said Jeremy Alexander, CEO of Beacon Research. "Sales of indexed annuities surpassed $10 billion for the first time, and nearly two thirds of carriers experienced an increase in MVA annuity sales during the quarter."

Total fixed annuity results were $22.6 billion in third quarter, up 31.0% sequentially and 35.2% from a year ago. Sales of indexed annuities increased 10.3% from second quarter to $10.1 billion in third quarter, setting new quarterly and year-to-date records. Income annuity sales, which include both immediate income and deferred income annuities (DIAs) combined for $2.8 billion, also setting quarterly and year-to-date records. DIA sales increased more than three-fold compared to third quarter 2012, and now represent 22% of income annuity sales, up from 11% a year ago. Sales of fixed-rate annuities rose sharply from the previous quarter, largely due to strong gains by three products.

Estimated Fixed Annuity Sales by Product Type (in $ millions)
Total Indexed Income Fixed Rate
Non-MVA
Fixed Rate
MVA
Q3 '13 22,460 10,051 2,815 7,122 2,467
Q2 '13 17,140 9,115 2,556 4,161 1,312
% change 31.0% 10.3% 18.6% 71.1% 88.1%
Q3 '13 22,460 10,051 2,815 7,122 2,467
Q3 '12 16,610 8,735 2,374 4,434 1,066
% change 35.2% 15.1% 10.1% 60.6% 131.5%
YTD 2013 54,560 26,954 7,558 15,295 4,751
YTD 2012 50,780 25,746 6,816 14,470 3,752
% change 7.4% 4.7% 10.9% 5.7% 26.6%

Second quarter results for the top five Study participants were as follows:

Total Fixed Annuity Sales, Q3 '13
Company Name (in $ millions)
New York Life 2,286
Security Benefit 1,803
Allianz Life 1,311
Western National 1,206
Great American 1,143

New York Life, Security Benefit, and Allianz Life also led the industry in total fixed annuity sales year-to-date.

Third quarter sales leaders by product type were as follows:

Product Type Company Name
Indexed Allianz
Income (SPIA, DIA combined) New York Life
Fixed-Rate Non-MVA Western National
Fixed-Rate MVA New York Life

Third quarter sales leaders by channel were as follows

Channel Company Name
Captive Agents New York Life
Independent Producers Allianz
Wirehouses Nationwide
Large/Regional B/Ds New York Life
Independent B/Ds Pacific Life
Banks & S&Ls Western National


New York Life had the top-selling product for third quarter as one of its MVA annuities, Secure Term MVA, moved into the top position. Joining the top five were two fixed-rate, non-MVA products from Massachusetts Mutual and Western National. These were the first fixed-rate non-MVA annuities in the top five since second quarter 2011.

Rank,
Q3 '12 Company Name Product Name Product Type
1 New York Life NYL Secure Term MVA Fixed Annuity Fixed-Rate MVA
2 Security Benefit Life Total Value Annuity Indexed
3 New York Life NYL Lifetime Income Annuity Income
4 Massachusetts Mutual Stable Voyage Fixed-Rate Non-MVA
5 Western National Proprietary Bank A Fixed-Rate Non-MVA

"At the pace seen in the past two quarters, we expect total fixed annuity sales for 2013 to exceed last year's numbers for the first year-over-year increase since 2008," Alexander concluded. "The outlook for indexed and deferred income annuities remains strong, in particular, and we expect to see increases in fixed-rate annuities, as well, should interest rate trends continue."

About the Beacon Research Fixed 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, and the first to put a decade's worth of historical industry, company and product sales information in an easily-searchable online database at www.annuitymarketstudy.com.

About Beacon Research

Beacon Research tracks fixed, indexed and variable annuity sales, rates and features, and provides web-based systems at www.annuitynexus.com for distributors and insurance companies. Beacon also licenses information and software tools to other platforms. 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 other distributors, as well as thousands of advisors and agents.

CONTACT: Lisa Plotnick, 617.523.7763, marketing@beaconresearch.net

Source:Beacon Research