For the first time, U.S. annuity sales were driven by growth in independent distribution channels last year, according to Windsor, Conn.-based industry data tracker Limra.
“For the second consecutive year, annuity sales have surpassed previously held records, largely due to broader engagement with independent distribution,” Bryan Hodgens, head of Limra research, said in a prepared statement.
Aggregate sales by independent agents and broker-dealers grew 29% last year compared to 2022, he said. These channels represented 41% of the year’s annuity sales.
Total U.S. annuity sales grew 23% in 2023 to more than $385 billion, as measured by Limra. Hodgens attributed this surge to rising interest rates, which increased the payouts of most annuities, especially fixed annuities, a category that also set sales records last year. Fixed annuity sales totaled nearly $287 billion for the year.
In the fourth quarter alone, total annuity sales surpassed $115 billion, a 29% jump from a year earlier and 23% higher than the record set in the first quarter of 2023.
“In addition to favorable interest rates, demographics have also played a role,” Hodgens said.
He pointed to the growing number of Americans aged 60 and older who rely on Social Security and savings to fund their retirements. Fixed annuities, he said, offer “investment protection and guaranteed growth at a higher rate than money market accounts and CDs.”
The growth in fixed annuities pushed a reshuffling of the top annuity sellers. In 2023, the top seller of annuities was Athene Annuity & Life, an independent retirement-solutions provider based in West Des Moines, Iowa, with nearly $270 billion in assets under management. It moved up a notch from the previous year’s total sales figures.
It was also tops in fixed annuity sales in both 2023 and 2022, though not variable annuity sales. The top seller of variable annuities in both years was Equitable Financial.
Athene’s dominance in fixed annuities was not enough to put it on top of the total sales chart in 2022, however, but it was in the most recent roster—a testament to the power of fixed annuities in 2023.
Athene seized the No. 1 spot from New York Life, which was at the pinnacle of total U.S. annuity sales in 2022 but dropped to fourth place last year.
Massachusetts Mutual Life jumped from fourth place in 2022 to second place in total annuity sales last year, again largely driven by fixed annuity sales.
Rounding out the top three last year was Houston-based Corebridge Financial, principally due to its sales of fixed annuities. It occupied the same rank a year earlier.
Holding fast to the No. 5 slot in total annuity sales in both 2023 and 2022 was Equitable Financial.