“We believe annuity manufacturers and advisors started to focus on indexed annuities in anticipation of the final DOL fiduciary rule, not knowing that indexed would be pulled under the best interest contract exemption in the final rule,” Giesing said.
Fixed-rate deferred annuities were up 90 percent year over year in the first quarter of 2016, sales likely driven by market volatility, said LIMRA.
Income annuities also had a strong first quarter, said the report, despite modestly lower interest rates. Fixed immediate annuity sales were up 25 percent from the first quarter of 2015, to $2.5 billion, while deferred income annuity sales jumped 29 percent to $729 million this year.
LIMRA also predicts that sales of qualified longevity annuity contracts, or QLACs, a type of deferred income annuity, will increase in 2016 as investors and advisors seek guaranteed income.
The overall sales of fixed annuity products are expected to increase between 15 and 20 percent throughout 2016, LIMRA said, but will begin to decline in 2017.
Overall annuity sales this year are expected to be level with 2015 results, while declines of 15 to 20 percent are expected in 2017 as the fiduciary rule is implemented.
The LIMRA Secure Retirement Institute’s first quarter survey represents data from 96 percent of the market.
LIMRA is a financial, insurance and retirement analyst based in Windsor, Conn.