Investors turned to annuities for protection in the first quarter, pushing sales up by 9% to $61 billion, according to the Secure Retirement Institute’s “U.S. Individual Annuity Sales Survey.”
Sales were driven by products providing principal protection and investment growth such as registered index-linked annuities (RILA), which jumped 88% to $9.2 billion, and fixed-rate deferred (FRD) annuities, which increased by 49% to $14.6 billion. RILA sales, the institute noted, represented more than 30% of total variable annuity sales.
“While market volatility has fallen, consumers are still feeling uncertain about the future and looking to protect not only their retirement savings, but also their nonqualified savings,” said Todd Giesing, assistant vice president of SRI Annuity Research, in a statement. “Nonqualified annuities increased 22% in the first quarter, while IRA sales only increased 2%.” Giesing noted that nonqualified annuity sales had not increased this much since the third quarter of 2018.
Consumers continue to shun long-term income, as sales of products with income features fell 16% from the previous year’s number. Income annuities, which include a combination of single premium immediate annuity (SPIA) and deferred income annuity (DIA) products, dropped 38% to $1.5 billion. Fixed-indexed annuities also declined by 17% to $3.5 billion.
Giesing said continued pent-up demand is the likely driver for the increased growth in protection products in the first quarter. “While SRI is forecasting sales growth to continue through 2025 as economic conditions improve, we expect growth of protection-based products to slow and income products to increase as we transition into the new normal in the U.S,” he said.
Leading in first quarter annuity sales were Jackson National Life with $4.73 billion, New York Life with $4.35 billion and the AIG Companies with $4.31 billion.