Annuities

Investors Seeking Protection Turn To Annuities In The First Quarter

RILAs, FRDs drive market growth

New market analysis from the Secured Retirement Institute finds that while market volatility has fallen, consumers are still feeling uncertain.

WINDSOR, Conn., June 8, 2021—Registered index-linked annuities (RILA) and fixed-rate deferred (FRD) annuities — products providing principal protection and investment growth — drove total annuity sales in the first quarter. Total annuity sales were $61 billion, up 9% from first quarter 2020, according to final results from the Secure Retirement Institute® (SRI®) U.S. Individual Annuity Sales Survey.

“RILA sales jumped 88% in the first quarter, representing more than 30% of total variable annuity sales and FRD annuity sales shot up 49%,” said Todd Giesing, assistant vice president, SRI Annuity Research. “While market volatility has fallen, consumers are still feeling uncertain about the future and looking to protect not only on their retirement savings, but also their non-qualified savings. Non-qualified annuities increased 22% in the first quarter, while IRA sales only increased 2%. The last time non-qualified annuity sales increased this much was in third quarter 2018.”

Long-term income planning remains lower on consumers’ list of financial priorities. Sales of products with income features* fell 16% in the first quarter compared with prior year results.

Final First Quarter Product Sales Results (YOY)

A ‘Continued Pent-Up Demand’

“It is likely we are seeing continued pent up demand drive the significant growth in protection products in first quarter,” noted Giesing. “While SRI is forecasting sales growth to continue through 2025 as economic conditions improve, we expect growth of protection-based products to slow and income products to increase as we transition into the new normal in the U.S.”

While market volatility has fallen, consumers are still feeling uncertain about the future and looking to protect not only on their retirement savings, but also their non-qualified savings...

For fourth quarter and annual sales results for each product, please visit First Quarter 2021 Annuities Industry Estimates, which can be found in LIMRA’s Fact Tank.

To view the top 20 rankings of total, variable and fixed annuity writers, please visit First Quarter 2021 Total Annuity Rankings here.

To view the top 20 rankings of traditional VA and RILA sales leaders, please visit First Quarter 2021 Variable Annuity Breakout Rankings here.

To view the top 20 rankings of fixed-rate deferred, fixed indexed and payout annuity writers for 2020, please visit First Quarter 2021 Fixed Annuity Breakout Rankings here.

Final first quarter 2021 annuities industry estimates are based on SRI’s quarterly annuity sales survey, representing 94% of the total market.

 

 

 

*Products included in analysis are variable annuities with guaranteed lifetime benefit riders (less guaranteed minimum accumulation benefit riders), FIA with guaranteed lifetime benefit riders, single premium income annuities and deferred income annuities.
About Secure Retirement Institute®
The Secure Retirement Institute® (SRI®) provides comprehensive, unbiased research and education about all aspects of the retirement industry to improve retirement readiness and promote retirement security. For information on the Secure Retirement Institute, visit: www.limra.com/sri.
Follow us on Twitter @LIMRANewsCenter

 

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