Total U.S. annuity sales increased 16% to $79.4 billion in the second quarter, according to LIMRA’s U.S. Individual Annuity Sales Survey. Fixed-rate deferred annuity and registered index-linked annuity sales reached an all-time record for the quarter, while fixed index annuity sales fell just short of a record quarter.
“All fixed products showed positive growth as consumers looked for safety from the volatile equity markets,” says Todd Giesing, assistant vice president, LIMRA annuity research. “With average yields at or above 3% for fixed-rate deferred annuities, it’s a rate environment we haven’t seen in a long time.”
FRDA sales led the way with a total of $28.7 billion in the second quarter, which is 79% higher than the figure seen during Q2 of 2021. In the first six months of 2022, fixed-rate deferred annuities totaled $44.6 billion, according to LIMRA, marking a 46% increase compared with the same period last year.
“Overall, banks and the full-service national broker/dealers are driving this record-setting growth. Second-quarter overall annuity sales through banks grew 48%, and sales through full-service national broker/dealers were up 55% for the quarter,” Giesing observes. “Independent broker/dealers have not taken advantage of the rising rates and growth in FRDAs. Overall sales by independent broker/dealers were down 12% for the quarter.”
Registered index-linked annuity sales saw the highest quarter ever in Q2, up 8% to $10.8 billion. In the first half of 2022, RILA sales were $20.4 billion, LIMRA’s survey found, which is 6% higher than prior year. RILA sales now make up 40% of overall variable annuity sales.
According to the survey, fixed index annuity sales also had a strong quarter, with $19.7 billion, up 19% from Q2 2021 and 20% year to date.
“When you look at the carriers that fared well in the quarter and in the first half of 2022, those with a diversified suite of annuity product offerings were most successful,” Giesing says.
Traditional variable annuity sales fell in Q2, dropping 27% to $16.5 billion—the lowest quarterly results since the fourth quarter of 1995. Sales are down 20% year to date.
Single premium immediate annuity sales totaled $2 billion, up 25% from the first quarter. Year to date, SPIA sales clocked in at $3.5 billion, 13% higher than prior year. Deferred income annuity sales grew 42% in Q2, to $520 million. In the first six months of the year, DIA sales totaled $890 million, 5% lower than prior year.
The Q2 annuity industry results are based on LIMRA’s quarterly annuity sales survey, which represents 90% of the total market.