Led by monster sales of fixed-indexed and income annuities, overall annuity sales hit $181.1 billion in the first half of 2023, increasing 27% and setting a new record, LIMRA reported.
While second quarter sales didn’t match the record high set in the first quarter, annuity sales jumped 10% from prior-year results to $87.1 billion.
The reasons for soaring annuity sales can be summed up in that old phrase about timing: the time is right.
“Economic conditions — particularly equity market performance and interest rates — have shifted but continue to be favorable for the annuity market,” said Todd Giesing, assistant vice president, LIMRA Annuity Research.
Fixed-indexed annuity sales led the way, with sales up 34% through six months. Likewise, registered indexed-linked annuities continued selling strong.
“In the second quarter, registered indexed-linked and fixed indexed annuity sales set records as investors seek solutions that offer greater upside growth potential while maintaining some level of downside protection,” Giesing said.
While income annuity sales were lower overall, the sales increase is striking. Single-premium income annuity sales of $6.8 billion nearly doubled first-half 2022 sales.
In a rare sales decline, fixed-rate deferred annuity sales declined sharply from a blockbuster first quarter.
Traditional variable annuity sales rose for the second consecutive quarter, but remain down significantly from their sales heyday a decade ago.
LIMRA expects the annuity sales market to remain hot for some time to come.
“LIMRA is forecasting a strong second half of the year and expects 2023 sales to potentially surpass the record sales set in 2022,” Giesing said.
Second quarter 2023 annuity industry estimates, representing 87% of the total market.