ANNUITIES Fixed Annuity Sales Set a Six-Year Record
U.S. sales of fixed annuities were $24.6 billion in the second quarter of 2008, according to a study by Beacon Research. Quarterly sales were 54% above those of second quarter of 2007, up 30% from the previous quarter, and the highest since the study began in 2003. Total market sales were 47% above the first half of 2007.
Jeremy Alexander, CEO of Beacon Research said, “Sales of all fixed annuity types increased in all but one minor distribution channel because conditions were favorable. Rates rose over the quarter and fixed annuity credited rates were available at or above the important 5% threshold. The yield curve flattened but remained positive, giving fixed annuities a rate advantage over other conservative interest-bearing alternatives. Indexed annuity cap rates rose along with immediate annuity payouts. We anticipate more growth in third quarter, but increases are likely to be more modest."
Book value sales more than doubled. Market value adjusted sales were up 89%, and immediates were up 30%. Indexed gains were a more modest at 4.5%. There was double-digit growth in all product types from the prior quarter: market value adjusted -- 54.4%, book value -- 32.5%, indexed -- 20.1%, and immediate -- 15.3%.
New York Life claimed overall sales leadership among study participants. In terms of sales by product type, New York Life was also the quarter's immediate annuity sales leader. AIG Annuity posted top book value sales. Aviva led in indexed sales. Four of the quarter's top five fixed annuities were book value products. New York Life's NYL Enhanced Fixed Annuity took top honors for the first time, followed by NYL Preferred Fixed Annuity. Allianz rejoined with Endurance 15 coming in fifth as the quarter's best-selling indexed annuity. Endurance 15 reclaimed bestseller status among independent producers for Allianz Life. For more information, visit www.annuitynexus.com.
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