Annuities

U.S. Annuity Sales Surge To Strongest First Quarter Ever

Total annuity sales jumped 21% to $113.5 billion.

A new report from LIMRA reveals RILA, FIA and income annuity sales all set records.

WINDSOR, Conn., April 25, 2024 —Total U.S. annuity sales were $113.5 billion in the first quarter of 2024, 21% above prior year results and just shy of the quarterly sales record set in the fourth quarter 2023, according to preliminary results from LIMRA’s U.S. Individual Annuity Sales Survey, representing 84% of the total U.S. annuity market. This is the highest first quarter sales results since LIMRA started tracking sales in the 1980s.

“The remarkable sales trends over the past two years continued into 2024. Favorable economic conditions and rising investor interest in securing guaranteed retirement income have resulted in double-digit sales growth in every product line,” said Bryan Hodgens, head of LIMRA research. “While there are potential regulatory and economic headwinds in the second half of the year, LIMRA expects annuity sales to continue to perform well.”

Fixed-Rate Deferred

Total fixed-rate deferred annuity (FRD) sales were $48 billion in the first quarter, 16% higher than first quarter 2023 sales. FRD annuities remain the primary driver of annuity sales growth, representing more than 42% of the total annuity market in the first quarter.

“Eighty-five percent of FRD sales are short duration products (less than five years). Higher interest rates combined with insurers’ ability to offer, on average, better crediting rates, have propelled product sales to another level,” noted Hodgens. “To put these first quarter results in perspective, from 2008 – 2021, the average annual FRD sales were just $42 billion, 14% lower than first quarter 2024 results.”

Fixed Indexed Annuities

Fixed indexed annuity (FIA) sales had a record first quarter. FIA sales totaled $29.3 billion, up 27% from the prior year.

“FIA products continue to offer very competitive crediting rates while protecting the principal investment, an attractive proposition for today’s investors,” said Hodgens.

Income Annuities

Income annuity product sales set a quarterly record due to rising interest rates. Single premium immediate annuity (SPIA) sales were $4 billion in the first quarter, 19% higher than the prior year’s results. Deferred income annuity (DIA) sales were $1.1 billion in the first quarter, increasing 35% year over year.

Favorable economic conditions and rising investor interest in securing guaranteed retirement income have resulted in double-digit sales growth in every product line...

Registered Index-Linked Annuities

For the fourth consecutive quarter, registered index-linked annuity (RILA) registered record quarterly sales. RILA sales increased 40% in the first quarter to $14.5 billion.

“Product innovation and new market entrants suggest the RILA market still has significant growth potential. LIMRA is forecasting RILA sales to exceed $50 billion in 2024,” Hodgens said,

Traditional Variable Annuities

Traditional variable annuity sales improved in the first quarter, up 13% year over year to $14.5 billion.

“Strong equity market performance over the past year has made traditional VAs more attractive,” said Hodgens. “While these products will not command the market share they did 10 years ago, LIMRA predicts the continued equity market growth will propel traditional VA sales to grow as much as 10% in 2024 from current levels.”

LIMRA Fact Tank

Preliminary first quarter 2024 annuity industry estimates are based on monthly reporting. A summary of the results can be found in LIMRA’s Fact Tank.

The top 20 rankings of total, variable and fixed annuity writers for first quarter 2024 will be available in mid-May, following the last of the earnings calls for the participating carriers.

 

 

 

About LIMRA
Serving the industry since 1916, LIMRA offers industry knowledge, insights, connections, and solutions to help more than 700 member organizations navigate change with confidence. Visit LIMRA at www.limra.com.