Sales of annuities this year are on a record-setting pace despite declining interest in variable annuities, according to third quarter data from LIMRA, an association of insurance and financial services companies.
Overall sales of individual annuities were $197.1 billion through the third quarter. Of that, $122 billion (62%) were from variable annuity sales. But sales of variables dipped 10% during that time. "The downward trend in the equities market has made a difficult environment for VA sales in 2008," said Joe Montminy, LIMRA's annuity research director.
On the other hand, sales of fixed annuities jumped 41% through the first three quarters, to $75.1 billion.
LIMRA's numbers jibe with a recent report from Beacon Research that showed fixed annuity sales leaped 54% in the third quarter. Beacon attributed that to a flight to quality during market turmoil, along with low interest rates that make fixed-rate annuities competitive versus bank certificate of deposits and Treasuries.