U.S. annuity sales were $106.7 billion in the first quarter of 2024, 13% above prior year results, according to results from LIMRA’s U.S. Individual Annuity Sales Survey. This is the highest first quarter sales results since LIMRA started tracking sales in the 1980s. The survey covers 92% of the total U.S. annuity market.
“Demand for investment protection and guaranteed retirement income remains strong. This is the 14th consecutive quarter of year-over-year growth in the U.S. annuity market,” said Bryan Hodgens, head of LIMRA research, in a press release.
“That said, total annuity sales have come down from fourth quarter 2024, largely due to a softening in the fixed-rate deferred annuity market. However, LIMRA expects annuity sales to perform well through 2024.”
Fixed-Rate Deferred
Total fixed-rate deferred annuity (FRD) sales were $43 billion in the first quarter, 4% higher than first quarter 2023 sales. This is the ninth consecutive quarter of growth for FRD annuity sales. FRD annuities remain the primary driver of annuity sales growth, representing more than 40% of the total annuity market in the first quarter.
Fixed indexed annuities
Fixed indexed annuity (FIA) sales had a record first quarter. FIA sales totaled $28.6 billion, up 24% from the prior year. FIA sales have experienced 12 consecutive quarters of year-over-year growth.
“Growth was widespread with 61% of FIA carriers and 8 of the top 10 carriers reporting sales growth,” the release said. “Sustained strong interest rates have allowed carriers to improve FIA crediting rates and raise cap rates, which increased the overall product line attractiveness. LIMRA expects FIA sales to continue to grow through 2025.”
Income annuities
Income annuity product sales continue to thrive under the higher interest rates. Single premium immediate annuity (SPIA) sales were $3.6 billion in the first quarter, 6% higher than the prior year’s results. Deferred income annuity (DIA) sales were $1.2 billion in the first quarter, increasing 40% year over year.
Registered index-linked annuities
For the fourth consecutive quarter, registered index-linked annuity (RILA) registered record quarterly sales. RILA sales increased 39% in the first quarter to $14.5 billion.
“For the second consecutive quarter, RILA sales outperformed traditional variable annuities (VAs). RILA sales should continue to outpace traditional VA sales throughout 2024. LIMRA is forecasting RILA sales to surpass $50 billion in 2024,” the release said.
Traditional variable annuities
Traditional VA sales improved in the first quarter, up 7% year over year to $13.7 billion.
“While traditional variable annuity sales grew in the first quarter, sales remain historically low,” said the release. “Today’s investors have more annuity options to achieve their accumulation goals than they did a decade ago.”
© 2024 RIJ Publishing LLC. All rights reserved.
