Expecting the final version of the DOL conflict of interest rule to allow sellers of indexed annuities to avoid signing a Best Interest Contract with IRA clients, LIMRA Secure Retirement Income Institute assistant research direct Todd Giesing said this week that he expects indexed annuities to do well again in 2016.
“We expect indexed annuity products will retain their current exemption status under the proposed DOL fiduciary rule, and that more companies will enter or increase their focus on this market. As a result, indexed annuity sales will see double-digit growth in 2016.” said Giesing.
A number of companies that have traditionally been strong in the variable annuity market are now increasing their attention on the indexed annuity market, the LIMRA release said.
But indexed annuity expert Sheryl Moore, CEO of Wink, Inc., told RIJ this week, “I believe that the DOL’s rule would negatively impact indexed annuity sales, at least initially. After all, 65% of [FIA] sales involve qualified funds. It would take some time for companies, marketers and salespeople to adjust to the ‘new normal,’ and whether that favors fee-based products, commission disclosure, or more.”
Below: Variable, fixed and total annuity sales by to 20 issuers in 2015, according to LIMRA Secure Retirement Institute.
Both LIMRA and Wink Inc. reported fourth quarter and full-year 2015 indexed annuity results this year, arriving at different totals based on the companies that report to them. According to the 74th edition of Wink’s Sales & Market Report, fourth quarter 2015 sales of indexed annuities were $15.5 billion, more than 12.0% higher than the previous quarter and over 30.0% higher than the fourth quarter of 2015. Wink claims to represents 55 carriers and 99.9% of indexed annuity production.
LIMRA Secure Retirement Institute reported indexed annuity sales of $16.1 billion in the fourth quarter of 2015 and $54.5 billion for all of 2015. “Indexed annuities have broken sales records for the past seven years and now represent nearly a quarter of the total annuity market,” said Giesing, in a release.
Allianz Life was the top-selling indexed annuity issuer in the fourth quarter, with a 14.5% market share, according to Wink. Its Allianz 222 Annuity was the top-seller for the fourth quarter in a row. According to LIMRA, Allianz Life FIA sales were $8.75 billion for all of 2015. American Equity Companies again was ranked second, followed by Nationwide, AIG, Great American, and Midland National, Wink said.
For indexed life sales, 46 insurance carriers participated in Wink’s Sales & Market Report, representing 94.9% of production. Fourth quarter sales were $541.5 million. Results were up over 13.0% when compared with the previous quarter, and up nearly 9.0% when compared to the same period last year. “Like indexed annuities, indexed life hit a record for the quarter and the year! It looks like AG49 pushed indexed life more than 4.0% over their prior record sales,” exclaimed Ms. Moore.
Transamerica maintained its top ranking in indexed life sales, with a 14.1% market share. Its Premier Financial Foundation IUL was the top-selling indexed life insurance product for the eighth consecutive quarter. Pacific Life continued in second place, followed by National Life Group, Minnesota Life, and Lincoln National Life. The average indexed UL target premium reported for the quarter was $8,640. That was more than 11% higher than the prior quarter.
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