Indexed annuities claimed more than half of fixed annuities sales for the third quarter, a record high, according to Beacon Research’s Fixed Annuity Premium Study released today.
Indexed annuities scored $8.7 billion, or 53 percent, of fixed annuity sales, while income annuities accounted for $2.4 billion, or 14 percent, of sales, also a record high. This marked income annuities' strongest quarter ever, Beacon says.
“Indexed and income annuities' market shares grew because their value propositions were attractive relative to the conservative alternatives in third quarter’s low interest-rate, uncertain economy,” says Jeremy Alexander, CEO of Beacon Research.
“They also became more dominant because fixed-rate annuity sales declined so significantly. Many carriers focused on the profitability of their fixed-rate annuity product lines at the expense of sales,” he says.
Total fixed annuity sales were $16.6 billion in the third quarter, down 13 percent from a year ago and down 3 percent from the prior quarter.
There was some shifting of the companies that made the top five in fixed annuity sales, with Security Benefit Life making the top five, at fourth place, for the first time. Aviva USA and New York Life switched places to come in second and third behind first place Allianz Life. American Equity took fifth place.