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Sales of All Fixed Annuity Product Types Rise in Second Quarter 2013, Beacon Reports

Beacon Research

EVANSTON, Ill., Sept. 3, 2013 (GLOBE NEWSWIRE) -- For the first time in two years,all fixed annuity product types posted sequential sales gains in second quarter 2013, according to the Beacon Research Fixed Annuity Premium Study. Indexed and deferred income annuities (DIAs) results hit record highs. Second quarter's improved interest rate environment helped to boost sales.

"In addition to the quarter's rising interest rates, the steepest yield curve in nearly two years enabled carriers to increase the rates they offered on fixed rate and indexed annuities. Credited rates on 5-year CD-type fixed annuities rose by an average of 35 basis points," said Jeremy Alexander, CEO of Beacon Research. "DIA sales were up almost 40% from first quarter due to continued demand for retirement income, larger payouts and new product introductions."

Total fixed annuity results were $17.1 billion in second quarter, up 14.6% sequentially and 0.2% from a year ago. Sales of indexed annuities increased 17.1% from first quarter to $9.1 billion. Income annuity results, which include DIAs, grew 16.9% sequentially to $2.6 billion. Sales of market-value-adjusted (MVA) annuities rose 34.9% from the prior quarter to $1.3 billion, largely due to big gains by two products.

Estimated Fixed Annuity Sales by Product Type (in $ millions)
Total Indexed Income Fixed Rate
Non-MVA
Fixed Rate
MVA
Q2 '13 17,140 9,115 2,556 4,161 1,312
Q1 '13 14,960 7,787 2,186 4,012 972
% change 14.6% 17.1% 16.9% 3.7% 34.9%
Q2 '13 17,140 9,115 2,021 4,161 1,312
Q2 '12 17,100 8,845 2,083 4,783 1,191
% change 0.2% 3.1% 11.8% -13.0% 10.1%
YTD 2013 32,100 16,902 4,743 8,173 2,284
YTD 2012 34,040 17,011 4,442 10,036 2,559
% change -5.7% -0.6% 6.8% -18.6% -10.8%

New York Life was the top-selling fixed annuity company in second quarter 2013, followed by Security Benefit Life, Allianz, American Equity and Great American Life. New York Life switched positions with Allianz. Security Benefit Life and American Equity remained in second place and fourth place, respectively. Great American entered the top five in fifth place.

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

Total Fixed Annuity Sales (in $ thousands)
New York Life 1,470,446
Security Benefit 1,434,104
Allianz Life 1,264,400
American Equity 1,135,553
Great American 837,615

Security Benefit was the new top seller of fixed-rate non-MVA annuities, jumping from sixth place in the previous quarter. Symetra moved from third place to become the new leader in bank channel sales. Pacific Life took the lead among independent broker/dealers, up from second place. The other top companies in sales by product type and distribution channel were unchanged from the prior quarter.

New York Life and Security Benefit Life each had two of the five top-selling fixed annuity products in second quarter. New York Life's Lifetime Income Annuity regained the top position from Security Benefit Life's Total Value Annuity, which moved to second place. Security Benefit Life's Secure Income Annuity and American Equity's Bonus Gold remained in third and fourth places, respectively. New York Life's Secure Term MVA Fixed Annuity joined the top five in fifth place, up from 12th place last quarter, and was the first MVA annuity in the top five since third quarter 2009.

Rank Company Name Product Name Product Type
1 New York Life NYL Lifetime Income Annuity Income
2 Security Benefit Life Total Value Annuity Indexed
3 Security Benefit Life Secure Income Annuity Indexed
4 American Equity Bonus Gold Indexed
5 New York Life NYL Secure Term MVA Fixed Annuity Fixed-Rate MVA

"We expect a modest increase in total fixed annuity sales in the coming months should interest rates continue to rise," Alexander concluded. "DIAs probably will continue the strong growth pattern we've seen in the past 18 months."

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, lisa@lisaplotnick.com Judith Alexander, 847.864.5447, ext. 103., Judith@beaconresearch.net

Source:Beacon Research