Indexed annuity sales were up 11 percent to $14.5 billion in the first quarter of 2018 from a year earlier, according to the LIMRA Secure Retirement Institute.
This is the second-strongest start for indexed annuities since LIMRA started tracking sales, the organization said. LIMRA has forecasted that annuity sales will increase 5 percent to 10 percent in 2018.
The sales were up 4 percent from the fourth quarter of 2017.
“While we typically see a seasonal decline in the first quarter, for the first time in eight years we saw growth in the indexed annuity market when compared to fourth quarter,” said Todd Giesing, annuity research director, LIMRA Secure Retirement Institute. “This uptick in sales is a combination of an improved outlook on a regulatory front, as well as rising interest rates creating the opportunity for more attractive rates.”
At $51.8 billion, overall U.S. annuities overall were about the same as first quarter 2017 results, according to the report.
Variable annuity (VA) sales reached $24.6 billion in the first quarter, a 1 percent drop from last year, marking the 17th consecutive quarter that VA sales have declined, LIMRA said.
Fee-based VA sales, however, increased 70 percent to $780 million, according to the study. Fee-based VAs represent only 3 percent of the total VA market.
Registered index-linked annuity sales increased 4 percent in the first quarter with $2.2 billion in sales. Sales were down 6 percent compared with the prior quarter. In total, these products represent 9 percent of the retail VA market.
Total fixed annuities experienced no change in the first quarter, with a total of $27.2 billion in sales. Fixed-rate deferred annuitiy sales fell 14 percent in the first quarter to $8.7 billion.
Compared to the first quarter in 2017, single premium immediate annuity (SPIA) sales increased 5 percent to $2.1 billion.
Deferred income annuities (DIA) experienced their smallest growth in sales since the first quarter in 2013. Sales dropped 6 percent in the first quarter to $515 million.