Fixed Index Annuity Sales Close 2010 On a High Note

Fixed indexed annuity sales shook off a lackluster to start to the year to finish 2010 with some much-needed momentum, according to Beacon Research’s latest “Fixed Annuity Premium Study” released this week.

Total annual indexed annuity sales surged 6% this year to a lot more than $31.4 billion while income annuity sales improved 2% to a lot more than $8 billion. Both retirement income investment products claimed their highest share of investment sales within the study’s eight-year history at 48% percent and 11%, respectively.

“Both product types benefitted from growing interest in guaranteed lifetime retirement income and defense against downside risk,” Beacon Research CEO Jeremy Alexander said within the report.

Annuities and other retirement income vehicles have enjoyed a decent resurgence previously year as more and more retired and soon-to-be retired investors search for steady, sustained sources of income that will last throughout the duration of the retirement.

In the fourth quarter, indexed annuity sales rose 16% in the year-ago quarter to a lot more than $8 billion and income annuity sales inched up 4% to a lot more than $1.9 billion in the quarter. On a sequential basis, however, sales of indexed annuities and income annuities slid 7% and 11%, respectively.

Fourth quarter indexed annuity sales were approximately $8 billion, 16% in front of fourth quarter 2009. Income annuity sales of $1.9 billion advanced 4% in the year-ago quarter. Indexed and income annuity sales fell quarter-to-quarter by 7% and 11%, respectively.

For that year, total U.S. sales of fixed annuities checked in at $71.7%, down 31% from 2009, a sign that investors continue to be dissatisfied with the poor rates of interest and spreads for fixed products. Fourth quarter sales overall for fixed annuities fell 14% in the year-ago quarter.

Annual book value sales tumbled 49% for the year to $26.5 billion while market-adjusted products plunged 61% to $5.8 billion. An identical story was told in the fourth quarter when book value sales declined 38% from the year-ago quarter to $5.6 billion.

Total U.S. sales of fixed annuities were approximately $71.7 billion in 2010. These results were 31% below 2009, the second-strongest year in the Study’s 8-year history. Estimated fourth quarter sales of $16.7 billion slipped about 14% when compared with both the year-ago and prior quarters.

By provider, Allianz led the pack using more than $2 billion in annuity sales in the quarter. American Equity Investment Life insurance coverage Co. checked in second at $1.55 billion then New York Life at $1.4 billion. Aviva USA and Western National Life rounded the top five at $1.33 and $1.1 billion, respectively.

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