"Despite broad equity market gains since March, variable annuities sales have been flat for two consecutive quarters (as compared to the prior quarter)," said Joe Montminy, research director for Limra annuity research.
"While variable annuity sales historically follow market trends, we believe that the decline in 1035 exchanges is impacting current variable annuity growth," he said, referring to an Internal Revenue Service provision that allows investors with annuities to exchange outdated contracts for more current and efficient contracts.
Meanwhile, variable annuity assets values have regained their pre-crisis values after five quarters of declines, according to a report issued Thursday by the Insured Retirement Institute, a trade group of annuity providers. Variable annuity assets grew by about 1% in the third quarter, the first quarter of growth since March of 2008, the group said.
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