Annuity sales are poised for big gains in 2023, with indexed annuity sales leading the way, according to the LIMRA Secure Retirement Institute.

Sales of all annuities are projected to increase five percent in 2019, with much of the growth driven by indexed and fixed-rate annuity sales, LIMRA said.

Annuity sales could exceed $280 billion in 2023, according to the insurance industry group.

Indexed annuity sales are expected to continue to grow by double digits, reaching $83 billion in 2019 and $96 billion by the end of 2023, which represent increases of 15 percent and 38 percent, respectively, over 2018, LIMRA said. 

Fixed-rate deferred sales are expected to rise to $52 billion in 2019 and $62 billion in 2023, which represent increases of 11 percent and 40 percent, respectively, over 2018.

“The volatility in the equity market may have investors looking to lock in their gains and provide a layer of protection for the portfolios. That, combined with rising interest rates, is the perfect recipe for growth for indexed and fixed-rate deferred annuities,” said Todd Giesing, LIMRA's director of annuity research.

Variable annuity sales in 2019 are expected to remain flat or decline slightly, totaling $100 billion, mainly because of weakness in the equity investment market. Only a modest increase, to $110 billion, is projected for 2023.

U.S. demographics point to increased demand for annuities, Giesing said.

“The number of people reaching age 65 or older will reach 60 million by 2023—the target market for individual annuity products,” he said. “Advances in technology will also contribute to the annuity market growth, improving the speed and ease of annuity transactions and attracting a broader group of advisors.’’