Total annuity sales, including exchanges, were down 8% in calendar 2017, to $203.5 billion, as prolonged low interest rates and anticipation of the Department of Labor (DOL) fiduciary rule dampened manufacturers’ appetite for business, according to LIMRA Secure Retirement Institute (LIMRA SRI).
For the year, indexed annuity sales fell 5% to $57.6 billion, compared with the prior year. Last year was the first year since 2009 where annual indexed annuity sales declined. Allianz Life of North America, Athene Annuity & Life and Nationwide held 29% of market share. The top 10 companies represented 63% of the market in 2017.
In the fourth quarter of 2017, however, year-over-year sales of book value fixed-rate annuities rebounded 11%, to $4.9 billion from $4.5 billion, on rising interest rates. Indexed annuity sales rose 5% (to $14.7 billion from $14.0 billion) in the fourth quarter, relative to the same period in 2016, on news that the Trump administration would postpone implementation of the fiduciary rule until July 2019 at the earliest.
Variable annuity (VA) sales were down 9% to $95.6 billion, falling below $100 billion for the first time in 20 years. VA sales have fallen 40% from their 2011 peak of $158 billion. Sales in 2017 were concentrated at the top, with Jackson National Life, TIAA (a group annuity seller) and AXA US, representing 42% of sales. The top 10 issuers accounted for 78% of the VA market.
At $107.9 billion, overall fixed annuity sales surpassed $100 billion for the third consecutive year while falling 8% from 2016 levels. The top three sellers, New York Life, AIG Companies and Allianz Life of North America, represented 24% of sales. The top 10 issuers accounted 53% of the market in 2017.
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