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Deferred Income Annuity Sales Continue to Rise in 2013, Beacon Reports


DEFERRED INCOME ANNUITY SALES CONTINUE TO RISE IN 2013, BEACON REPORTS

 

Allianz Regains Its #1 Position; Western National Retakes the Lead in Banks

 

Evanston, IL, June 6, 2013—Sales of deferred income annuities reached a record high in first quarter 2013, according to the Beacon Research Fixed Annuity Premium Study. Results for these products increased for the fifth consecutive quarter and were nearly 150% higher than a year ago.  The success of DIAs helped overall income annuity sales grow 1.4% year-over-year.

 

“Deferred income annuities were a bright spot in a difficult quarter,” said Jeremy Alexander, CEO of Beacon Research. “Ongoing product development and increasing sales underscore the importance of generating guaranteed retirement income for consumers and their advisors.”

 

But the industry continued to be impacted by the ongoing low interest rate environment. Total fixed annuity results were $15 billion in first quarter, down 11.7% from a year ago and 7.7% sequentially. However, fixed rate MVA sales dipped only slightly from the prior quarter, suggesting that consumers are willing to accept some potential interest rate risk in exchange for higher credited rates.  Indexed annuity sales decreased 7.9% quarter-on-quarter to $7.8 billion, and fixed rate non-market value-adjusted (MVA) annuities fell 8.1% sequentially to $4.0 billion.  Income annuities dropped 8.2%.

 

Estimated Fixed Annuity Sales by Product Type (in $ millions)

 

Total

Indexed

Income

Fixed Rate

Non-MVA

Fixed Rate

MVA

Q1 ‘13

14,960

7,787

2,186

4,016

972

Q4 ‘12

16,200

8,452

2,381

4,369

999

% change

-7.7%

-7.9%

-8.2%

-8.1%

-2.7%

Q1 ‘13

14,960

7,787

2,186

4,016

972

Q1 ‘12

16,940

8,166

2,156

5,253

1,368

% change

-11.7%

-4.6%

1.4%

-23.5%

-28.9%

 

Allianz was once again the top fixed annuity company in first quarter 2013, followed by Security Benefit Life, New York Life, American Equity and Jackson National. Security Benefit Life moved to second place. New York Life remained in third place, American Equity moved up a notch to come in fourth, and Jackson National rejoined the top five in fifth place.

 

First quarter results for the top five Study participants were as follows:

 

Total Fixed Annuity Sales (in $ thousands)

Allianz Life

1,163,724

Security Benefit

1,105,733

New York Life

1,079,443

American Equity

929,899

Jackson National

743,682

 

In first quarter, Western National Life moved from fifth place to take the lead in bank channel and fixed rate non-MVA sales. The other top companies in sales by product type and distribution channel were unchanged from the prior quarter.

 

 

 

 

 

 

 

 

 

Security Benefit Life had two of the quarter’s five top-selling fixed annuities for the first time. Its Total Value Annuity was the quarter’s bestseller, up fourth place last quarter, and Secure Income Annuity joined the top five in third place. New York Life’s Lifetime Income Annuity, the quarterly bestseller throughout 2012, finished second. American Equity’s Bonus Gold and Allianz’s Endurance Plus indexed annuities both dropped two notches, but remained in the top five at number four and five , respectively.

 

 

Rank

Company Name

Product Name

Product Type

1

Security Benefit Life

Total Value Annuity

Indexed

2

New York Life

NYL Lifetime Income Annuity

Income

3

Security Benefit Life

Secure Income Annuity

Indexed

4

American Equity

Bonus Gold

Indexed

5

Allianz Life

Endurance Plus

Indexed

 

 

“We expect that fixed annuity sales in the coming months will follow the pattern set early in the year,” Alexander concluded. “Sales may increase slightly coming off from a record year for indexed and income annuities, but low interest rates will continue to hamper significant growth in the near future.”

           

 

About the Beacon Research Fixed Annuity Premium Study

 

The quarterly Study is the first and only source to track and analyze product-level fixed annuity sales on an ongoing basis, and the first to put a decade’s worth of historical industry, company and product sales information in an easily-searchable online database at www.annuitymarketstudy.com.

 

About Beacon Research

 

Beacon Research tracks fixed, indexed and variable annuity sales, rates and features, and provides web-based systems for distributors and insurance companies. Beacon also licenses information and software tools to other platforms. Beacon's fixed annuity benchmark series -- the industry's first - is available through Ibbotson Associates. Directly and through strategic alliances, Beacon information can be accessed by hundreds of financial institutions and other distributors, as well as thousands of advisors and agents. Visit www.beaconresearch.net for more information.

 

Contact:  Judith Alexander, 847.864.5447, judith@beaconresearch.net