Annuity sales posted their best quarter ever in the third quarter this year, according to Windsor, Conn.-based data tracker LIMRA.

Overall sales came in at nearly $81 billion, a 29% increase from a year ago. Over the first three quarters of 2022, total annuity sales surpassed $223 billion, a jump of 17% from a year earlier.

In the quarter, the top annuity provider was New York Life, with more than $16 billion in annuity sales, followed by Corebridge Financial with $14.8 billion and Athene Annuity & Life with $12.9 billion.

In a press release, Todd Giesing, assistant vice president of LIMRA Annuity Research, attributed these gains to several factors.

First, market volatility has pushed clients to safer, steadier products like fixed-rate deferred annuities (FRDs), sometimes called multiyear-guaranteed annuities (MYGAs), which offer a guaranteed interest rate over a specific period of time, he said. At the same time, though, other guaranteed products such as bank CDs were not generating enough yield to attract savers, despite higher interest rates.

In fact, bank sales of fixed deferred annuities helped propel these products to new heights. Their sales in banks jumped 243% in the third quarter.

“The average fixed-rate deferred crediting rates continued to be more than triple the rates offered in bank CDs in the third quarter, which enticed bank customers to buy FRD annuities. As a result, bank FRD sales represented nearly half (49%) of the record-high fixed-rate deferred sales in the third quarter,” said Giesing.

Overall FRD sales in the quarter tallied $30 billion, a 161% year-over-year increase and the best sales quarter for this product in history. Year-to-date, these annuities posted nearly $75 billion in sales, leaping 77% from the corresponding figure in 2021. By year-end, LIMRA estimates that FRD sales will be close to $100 billion, a new record.

The top fixed annuity provider was New York Life, with $10.7 billion in fixed annuity sales, followed by Massachusetts Mutual Life with $6.9 billion and Western Southern Group with $5.3 billion.

But FRDs weren’t the only types of annuities posting impressive gains.

Fixed indexed annuities (FIAs), which credit holders with a percentage of the gains on an equity index while guaranteeing that account values can never drop, even if the equity index falls, also set a quarterly sales record. That, too, was partly due to bank sales. Total FIA sales in the quarter were $21.5 billion, a 26% jump from the preceding year. Bank sales of these products represented roughly 20% of the market; a year ago, bank sales accounted for only 16% of the FIA market. FIA sales year-to-date grew 22% year-over-year to $57.5 billion.

“Under the current economic environment, FIAs are very attractive to investors seeking principal protection with potential investment growth,” Giesing explained.

Fixed annuities' gains are variable annuities' (VAs) loss. These products, which enable annuity holders to invest in mutual-fund-like subaccounts, were hurt by volatile equity markets. In the third quarter, overall VA sales fell 34% year-over-year to $14.1 billion, the third consecutive quarter of double-digit declines and the lowest quarterly results since 1995.

The best-selling VA provider was Jackson National Life, with $10.4 billion in VA sales. A distant second was TIAA, with $5.7 billion, followed by Equitable Financial with nearly $5 billion.

The one exception in the VA category was registered index-linked annuities (RILAs), which are a kind of variable annuity that’s structured to provide upside potential when the subaccount gains value and a degree of downside protection if it loses value. RILA sales in the quarter advanced 14% from the corresponding quarter a year ago, to $10.6 billion. Year-to-date, their sales amounted to $31 billion, a modest 9% year-over-year gain. In the past three years, when equity markets were soaring, RILA sales grew more than 30% annually.