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Fixed Annuities Continue Strong Sales Pace in 2013, Best Year Since 2009

Beacon Research

NORTHFIELD, Ill., April 2, 2014 (GLOBE NEWSWIRE) -- The fixed annuity industry had one of its strongest years of sales growth in 2013, according to the Beacon Research Fixed Annuity Premium Study. For the first time, all annuity types achieved positive sales growth year-over-year, as both indexed and income annuities continued to shatter previous sales records.

"Fourth quarter 2013 marked a number of milestones with respect to fixed annuity sales, contributing to a banner year for the industry," said Jeremy Alexander, CEO of Beacon Research. "Total sales increased for three consecutive quarters—the first time since early 2009, sales through independent producers reached an all-time high of nearly $10 billion, and sales of income annuities (DIAs) crossed the $3 billion mark."

Total fixed annuity sales in 2013 were $78.1 billion, up 16.6 percent from the prior year. This marked the highest annual total since 2009. For fourth quarter 2013, total sales were $23.5 billion up 4.7 percent sequentially and 45.2 percent from a year ago. Sales of indexed annuities increased 17.0 percent from third quarter to $11.8 billion in fourth quarter, setting new quarterly and year-to-date records. Income annuity sales, which include both immediate income and deferred income annuities (DIAs) combined for $3.5 billion, also setting quarterly and year-to-date records. DIA sales for fourth quarter increased 27 percent compared to third quarter 2013 and now represent 20 percent of income annuity sales, up from 16 percent a year ago.

Estimated Fixed Annuity Sales by Product Type (in $ millions)
Total Indexed Income Fixed Rate
Non-MVA
Fixed Rate
MVA
Q4 '13 23,520 11,757 3,472 6,332 1,965
Q3 '13 22,460 10,051 2,815 7,122 2,467
% change 4.7% 17.0% 23.3% -11.1% -20.4%
Q4 '13 23,520 11,757 3,472 6,332 1,965
Q4 '12 16,200 8,452 2,381 4,369 999
% change 45.2% 39.1% 45.8% 44.9% 96.7%
YTD 2013 78.080 38,710 11,029 21,627 6,715
YTD 2012 66,980 34,198 9,197 18.840 4,751
% change 16.6% 13.2% 19.9% 14.8% 41.4%

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

Total Fixed Annuity Sales, Q4 '13
Company Name (in $ millions)
Allianz Life 2,321
Security Benefit 1,711
New York Life 1,389
Great American 1,359
American Equity 1,094

New York Life ($6,224 million), Allianz Life ($6,061 million), and Security Benefit ($6.054 million) led the industry in total fixed annuity sales year-to-date, and combined for a 23.5% share of industry sales for the year.

Sales leaders by product type for fourth quarter and full-year 2013 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 Western National (Q4 '13), New York Life (YTD)

Sales leaders by channel for both fourth quarter and full-year 2013 were as follows:

Channel Company Name
Captive Agents New York Life
Independent Producers Allianz
Wirehouses Pacific Life (Q4 '13), Nationwide (YTD)
Large/Regional B/Ds Massachusetts Mutual (Q4 '13), New York Life (YTD)
Independent B/Ds Pacific Life
Banks & S&Ls Western National

Allianz Life had the top-selling fixed annuity for fourth quarter with one of its indexed annuities, Allianz 360. Indexed annuities represented four of the five top-selling fixed annuity products and seven of the ten top-selling fixed annuity products in fourth quarter 2013. For the full year, four of the five top sellers and six of the top ten sellers were indexed annuities.

Rank,
Q4 '13 Company Name Product Name Product Type
1 Allianz Allianz 360 Indexed
2 Security Benefit Life Total Value Annuity Indexed
3 New York Life NYL Lifetime Income Annuity Income
4 Pacific Life Pacific Index Choice Indexed
5 American Equity Bonus Gold Indexed

"We expect total annuity sales growth to continue modestly during the first half of 2014," Alexander concluded. "Treasury rates in the early part of the year have held steady, enabling carriers to maintain their credited rates and build off the momentum achieved in 2013."

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