Though sales ticked upward in the second quarter, the U.S. annuities industry remains in a slump, according to a recent report from the Insured Retirement Institute.
Industry-wide annuity sales totaled $50.4 billion in the second quarter, a 2.4 percent increase from sales of $49.2 billion in the first quarter, but a 9.8 percent decline from sales of $55.9 billion in the second quarter of 2016, according to the institute.
Fixed-indexed annuity sales rose 10 percent in the second quarter of 2017, the institute reported.
Despite the year-over-year declines, IRI touted the report as a positive development.
“It is ... encouraging to see growth in industry-wide sales of annuities," said Cathy Weatherford, IRI president and CEO, in released comments. "IRI believes annuity sales will continue to increase as thousands of Americans enter retirement each day and seek solutions that will provide them with secure sources of income throughout their retirement years.”
Fixed annuity sales during the second quarter of this year totaled $26.7 billion, a 3.1 percent increase over sales of $25.9 billion during the first quarter, but a 9.5 percent decline from sales of $29.5 billion during the second quarter of 2016.
The IRI reported that fixed-indexed and income products led the gains in total fixed annuity sales. Sales of fixed-indexed annuities rose 10 percent in the second quarter to $14.9 billion. Income annuity sales rose 11 percent in the second quarter to $2.8 billion.
Variable annuity sales totaled $23.8 billion, a 1.7 percent increase from $23.3 billion in first quarter sales, but a 10.2 percent decline from $26.4 billion in sales during the second quarter of 2016.
Variable annuity net assets rose 1.8 percent to $1.98 trillion during the second quarter of 2017, posting a 5.1 percent year-over-year increase from $1.88 trillion at the end of the second quarter of 2016. Strong market performance was able to overcome lower sales and negative net flows from variable annuities. In the second quarter, net flows in variable annuities were -$14.8 billion.
The report echoed recent data reported by LIMRA that found total annuity sales declined about 10 percent during the first half of 2016 to $105.8 billion, their lowest level since 2001. Unlike the IRI, LIMRA predicted that annuity sales would continue to fall in 2017, with variable annuity sales dropping another 10 percent to 15 percent for the calendar year.