Sales for annuities were a mixed bag for the third quarter of 2022, but multiyear guaranteed annuities and indexed annuities saw remarkable gains, according to a report by Wink Intelligence, an insurance industry data reporting organization based in Des Moines, Iowa.
Total third quarter sales for all deferred annuities were $72.4 billion, a decrease of 0.4% when compared to the previous quarter but an increase of almost 21% compared to the same period last year, the firm said. All deferred annuities include variable annuities, structured annuities, indexed annuities, traditional fixed annuities, and multi-year guaranteed annuities.
Overall deferred annuity sales were flat (a 0.4% decline) from the second quarter to the third because the gains made by indexed annuities and multiyear guaranteed annuities were offset by declines in variable annuity sales. “The variable annuity product line just could not keep up with the market’s dive over the third quarter,” Sheryl J. Moore, CEO of Wink Intelligence, said in an email.
Indexed annuity sales for the third quarter were $20.9 billion, up more than 6.9% when compared to the previous quarter, and up more than nearly 21% when compared with the same period last year.
Multiyear guaranteed annuity sales in the third quarter were $27.4 billion, an increase of 4.7% when compared to the previous quarter, and a dramatic 138% increase when compared to the same period last year. Multiyear guaranteed annuities have a fixed rate that is guaranteed for more than one year.
“Multiyear guaranteed annuities sold well because CD rates are so low, relative to the rates on these products. For example, CDs are earning less than 1%, and multiyear guaranteed annuities are earning as much as 5.7%,” Moore said.
Indexed annuities saw gains in their sales because of the recent decline in the market, she said. These products preserve principal and give the opportunity for limited gains when the market goes up. “Indexed annuities saw gains in their sales because of the recent decline in the market. These products preserve principal and give the opportunity for limited gains when the market goes up,” she added.
Other types of annuities had modest gains or losses when compared to the second quarter of this year, but dramatic gains when compared to the third quarter of 2021.
Total third quarter non-variable deferred annuity sales were $48.8 billion, an increase of 5.5% when compared to the previous quarter but an increase of more than 67% when compared to the same period last year.
Third quarter sales for traditional fixed annuities were $451.6 million, down by 6.8% compared to the previous quarter, but up more than 25% when compared with the same period last year.