Last year, AIG Companies helped create the Alliance for Lifetime Income to educate the public and advisors about the advantages of lifetime income products like annuities. AIG was one of the biggest companies in that coalition, and it’s also now a beneficiary of an annuity sales increase.
Annuity sales across the board are on the rise. It’s estimated that total sales for the fourth quarter will have jumped 15 percent from $203.5 billion during the previous year’s fourth quarter to $233.7 billion, according to LIMRA. Fixed annuities are expected to see a 27 percent jump from $105.3 billion to $133.5 billion. Variable annuity sales are up 2 percent from $98.2 billion to $100.2 billion after several quarters of consecutive declines.
And AIG is back on top. The company has taken over the leaderboard in the 2018 Top 20 Annuity Sales Ranking report by LIMRA SRI, with a total of $18.4 billion in sales, of which $11.6 billion is fixed annuities and $6.8 billion is variable annuities. This marks the first time since 2007 that AIG has led in annuities sales.
“Our strategy is not about market share but instead to be in a position to compete at scale in each of our businesses,” said Kevin Hogan, chief executive officer of AIG Life & Retirement.
Hogan added that AIG has a strong presence across fixed, index and variable annuities, “and we’re pleased the market has responded so positively to our offerings.”
Todd Giesing, LIMRA’s director of annuity research, said, “Annuity sales and particularly fixed annuity sales have benefited from economic factors and regulatory clarity.”
He’s referring to the end of the Department of Labor’s fiduciary rule, which would have required advisors to meet more stringent requirements for revealing their interest in sales of things like annuities. That rule died in court, and annuity sales have blossomed.
Also, he said, “Rising interest rates throughout most of 2018 benefited fixed annuity sales, and recent equity market volatility had individuals looking for downside protection, a feature many fixed annuities provide. When you combine that with regulatory clarity in 2018, this drove fixed annuity sales up 27 percent and overall individual annuity sales up 15 percent.”
Fixed annuities had a record-breaking sales year, LIMRA noted. This is the fourth consecutive year that annual fixed annuity sales surpassed $100 billion. The top three sellers of fixed annuities were: AIG Companies, New York Life and Allianz Life of North America, together representing 24 percent of the market share. In 2018, the top 10 companies held 55 percent of the market, LIMRA noted.
In addition, LIMRA said this was the first time in six years that total variable annuity sales had growth. The three top sellers of variable annuities were: Jackson National Life, AXA US and TIAA, representing 38 percent market share. The top 10 companies held 78 percent market share in 2018.