Annuity Sales Surging
The combination of high rates and an uncertain economic outlook have resulted in record sales for annuities. In the first three quarters of the year, total annuity sales were up 21% compared to last year for a total of $270.6 billion according to LIMRA’s US Individual Annuity Sales Survey. To compare, there was a total of $255 billion in sales in 2021 which was the last year of the ZIRP era.
In Q3, sales were up 11%, reaching $89.4 billion. LIMRA is forecasting another record year of sales for 2023, exceeding 2022’s record sales of $313 billion. Within the category, fixed indexed annuities continue to dominate, accounting for $23.3 billion in sales in Q3, a 9% gain from last year. YTD, these annuity products have accounted for 26.5% of total annuity sales.
Single premium immediate annuities and deferred income annuity sales saw the biggest increases at 20% and 88% compared to last year’s Q3, respectively. LIMRA is bullish on income annuities which tend to rise with interest rates. According to the group, “Income annuities will hit record levels in 2023, with sales in this category expected to exceed $16 billion for the year.”
Finsum: Annuity sales are hitting new records. Most of this can be attributed to the rising rate environment and risk-aversion among many investors.
- advisors
- income
- annuities
