The Pulse

Individual Annuity Premiums Soar To Stratospheric Heights In Q1 2023

Rising interest rates and market tumult created ideal conditions for fixed annuity issuance in the first quarter of 2023

A new report from S&P Global Market Intelligence reveals the US life industry posted its highest total of direct ordinary individual annuity premiums and considerations in any quarter on record and its strongest rate of year-over-year growth in nearly 22 years.

Direct ordinary individual annuity premiums and considerations surged by 43.3% to $82.67 billion in the first quarter, according to data compiled as of May 19.

  • Athene Annuity and Life Co.’s $8.55 billion in direct ordinary individual annuity premiums and considerations stands as the largest total on record in any quarter for a single US entity, eclipsing its previous high-water-mark of $7.67 billion in the fourth quarter of 2022.


  • Industry volumes in the ordinary individual annuity business have surged since the Federal Reserve began the current interest rate tightening cycle in March 2022, rising by 28.5% during the trailing-12-month period ended March 31.

The outsized expansion occurred despite marked weakness in the variable annuity business.

  • The LIMRA Secure Retirement Institute observed massive growth in fixed-rate deferred annuity sales, which increased by 157% in the first quarter, but a decline of 30% in sales of traditional variable annuities.
  • Direct ordinary individual annuity premiums and considerations for leading variable annuity producers Jackson National Life Insurance Company and Teachers Insurance & Annuity Association of America fell by double-digit percentages.

Growth in individual annuities more than offset weakness in business volume for group annuities and ordinary life insurance as direct premiums and considerations across lines increased by 9.0% on a year-over-year basis.

  • Comparisons will become markedly more challenging beginning with the second quarter of 2023 given the boost that rising interest rates began to provide to fixed annuity sales in the year-earlier period.

Individual Annuities

Athene Annuity & Life’s first-quarter direct ordinary individual annuity premiums and considerations surged by 195.4% on a year-over-year basis. They increased by 11.5% from the company’s previous all-time high in the fourth quarter of 2022.

Athene Holding Ltd. President Grant Kvalheim, speaking during a May 18 conference call, credited factors such as the combination of higher interest rates, consumers’ desire for principal protection during a period of market volatility and his company’s product positioning for its record first-quarter production. In its quarterly report on Form 10-Q, Athene said its multiyear guaranteed annuity product had a “record quarter” and that its indexed annuity products performed strongly. The company distributes its annuities through approximately 54 independent marketing organizations, approximately 81,000 independent agents, 16 banks and 134 regional broker-dealers.

Among the 13 other individual US life entities with at least $2 billion of direct ordinary individual annuity premiums and considerations in the first quarter, all but the primary Jackson Financial Inc. subsidiary generated year-over-year growth of more than 19.4%. Security Benefit Life Insurance Co. and Fidelity & Guaranty Life Insurance Co. joined Athene Annuity and Life in more than doubling their direct ordinary individual annuity business volumes on a year-over-year basis.

Generating growth of comparable magnitudes will become increasingly difficult beginning with the second quarter. If the industry were to replicate its first-quarter production in the second quarter, it would mark a year-over-year expansion of 15.4% as production materially increased between the first two quarters of 2022.

Ordinary Life

The effects of challenging year-over-year comparisons have been visible in the ordinary life business for three consecutive quarters.

Direct ordinary life premiums fell by 4.3% in the first quarter, marking a third straight year-over-year decline, as industry tallies for the trailing-12-month periods ended March 31, 2022, had been materially boosted by benefits from a favorable change in the federal income tax code.

The Northwestern Mutual Life Insurance Co., which experienced double-digit percentage growth in direct ordinary life premiums in successive quarters for the first time in at least two decades in 2021, posted a 1.2% retreat in the first quarter. The company attributed the decline to lower single premium insurance sales. Massachusetts Mutual Life Insurance Co., the second-largest ordinary life writer during the first quarter behind Northwestern Mutual, saw a decline of 12.7%.

Group Annuities

Another victim of challenging comparisons in the first quarter was the group annuity business as direct premiums and considerations in that business line dropped by 20.4%. The business line benefited in 2022 from the combination of strong sales of stable value products in a time of heightened market volatility and record activity in the pension risk transfer market.

Legal & General America Inc. projected that industry pension-risk-transfer volume would reach a new first-quarter high of approximately $6 billion, but market participants showed mixed results in a business where large, one-time transactions promote lumpiness.

Prudential Financial Inc. reported that its results benefited from higher pension-risk-transfer premiums due to “a significant sale,” but Athene’s Kvalheim described the first quarter as a “subdued” period for the issuance of pension-risk-transfer group annuities.

While Athene Annuity & Life’s direct group annuity volumes dropped in the first quarter by 97.2%, its fortunes may reverse dramatically in the second quarter. Kvalheim said that the company inked its largest-ever pension-risk-transfer transaction earlier in May. The company issued a single-premium group annuity of $8.05 billion in connection with a transaction involving certain AT&T Inc. pension obligations.

The industry as a whole faces a high hurdle in the pension-risk-transfer business for the balance of 2023 given the growth that took place in 2022, but both Legal & General and Kvalheim maintain positive near-term outlooks.




Results from statutory filings reflect data obtained by S&P Global Market Intelligence as of May 19, supplemented by the manual addition of data for Oceanview Life & Annuity Co. For periods prior to 2023, results including operating, acquired and otherwise defunct individual entities.
While the data is subject to change upon the receipt of additional information, we would not expect material changes to the industry totals given the size of the remaining entities for which first-quarter 2023 financials are not available.


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