Indexed Annuity sales for the third quarter totaled $8.7 billion, up 6% from last quarter and, with one more quarter to go, are on pace for a record year. Compared to last year’s 3rd quarter sales are up 16% percentage points.
To Joseph Montiminy, assistant vice president for LIMRA’s annuity research, this is no surprise. “It is not surprising that sales of indexed annuities had a record quarter. This is the ideal market for indexed annuity sales: lots of volatility in the equities markets coupled with low credited rates and declining interest rate spreads on traditional fixed-rate annuities. This has attracted some conservative consumers that might have purchased a traditional fixed-rate annuity. Indexed annuities have now grown to represent 41 percent of the fixed annuity market.”
Traditional fixed annuities had a worse third quarter when compared to the second, slipping to $21.2 billion in premium. When compared to 2009’s third quarter, 2010 was down 10%. Variable annuity sales declined 2% in the third quarter, totaling $34.9 billion.
Half way through the fourth quarter, how do you think the year will end up for annuities overall?