WINDSOR, Conn., Nov. 16, 2022—For the second consecutive quarter, bank sales propelled fixed-rate deferred (FRD) and fixed-indexed annuity (FIA) sales to reach record levels. FRD sales in banks jumped 243% in the third quarter and bank FIA sales leapt 61%.
Overall annuity sales were $80.7 billion in the third quarter, a 29% increase from prior year results, according to LIMRA’s U.S. Individual Annuity Sales Survey. This represents the highest quarterly annuity sales results ever.
Year-to-date, total annuity sales were $223.4 billion, 17% higher than the first three quarters of 2021.
Total fixed-rate deferred annuity sales were $30 billion in the third quarter 2022, 161% above third quarter 2021 results. This is the best sales quarter for FRD products ever recorded. In the first nine months of 2022, FRD annuities totaled $74.6 billion, 77% higher than the same period last year. LIMRA expects fourth quarter FRD sales to fall below third quarter results as alternative product solutions become more competitive in an inverted yield curve environment. Still, FRD sales will close in on $100 billion in 2022, a record for annual FRD sales.
“The average fixed-rate deferred crediting rates continued to be more than triple the rates offered in bank CDs in the third quarter, which enticed bank customers to buy FRD annuities. As a result, bank FRD sales represented nearly half (49%) of the record-high fixed-rate deferred sales in the third quarter,” said Todd Giesing, assistant vice president, LIMRA Annuity Research.”
Income annuities have rebounded to pre-pandemic levels due to rising interest rates. Single premium immediate annuity (SPIA) sales were $2.5 billion in the third quarter, a 58% year-over-year increase. YTD, SPIA sales were $6 billion, 28% higher than the same period last year.
Deferred income annuity (DIA) sales did not fare as well. In the third quarter, DIA sales fell 1% to $505 million. YTD, DIA sales were $1.4 billion, 4% lower than prior year.
Overall, LIMRA is forecasting income annuity sales to grow more than 10% in 2022 with steady growth projected through 2026.
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