Advisor Today - April 2009

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facts & figures 26%
Individual Fixed Annuity Sales Up

Overall sales of individual annuities reached $197.1 billion through the first three quarters of 2008, according to a LIMRA report.

The turmoil in the equities market stifled variable annuity (VA) sales, which dropped 18 percent in the third quarter over the same period in 2007, says Joe Montminy, LIMRA’s annuity research director.

Fixed annuity sales were up 41 percent as sales reached $75.1 billion.
Book value sales were up 78 percent, market value adjusted (MVA) sales
increased 80 percent, and indexed annuity sales improved 3 percent in
2008, LIMRA says. Fixed annuity sales rose 46 percent to $28.5 billion
in the third quarter compared to the same period in 2007. Book value and
MVA sales increased 85 percent and 70 percent respectively, while fixed
indexed annuity sales grew 5 percent. Fixed immediate annuity sales were
up 26 percent to $5.9 billion.

For the first nine months of 2008, VA sales reached $122 billion, a decrease of 10 percent. More than 80 percent of new VA premiums went into contracts that included a guaranteed living benefit rider, LIMRA estimates. Such riders apparently “softened the decline in VA sales, since the decrease in

VA sales was about half of the decline experienced in the equities market,”

Montminy says.

Deferred annuity assets fell 5. 2 percent during the third quarter to $1.85 trillion, the worst single-quarter performance since the beginning of 2007, LIMRA says.