As Industry Wide Sales Rise,

VA Assets Post Highest Level Ever Recorded

WASHINGTON, D.C. - The Insured Retirement Institute (IRI) today announced first quarter results for the United States annuity industry. Annuity sales for the first quarter posted a double digit increase over sales from the same time period last year.  Industry wide sales were $58.1 billion, up 17% from $49.7 billion in the first quarter of 2010.  First quarter sales also garnered quarter-to-quarter growth, increasing at a rate of 5% over $55.2 billion from the fourth quarter of 2010. Of note, variable annuity assets reached $1.6 trillion, the highest level ever recorded by Morningstar.

"With the first wave of the 79 million Baby Boomers turning 65 this year, guaranteed retirement income strategies clearly are being relied upon in growing numbers," said IRI President and CEO Cathy Weatherford. "Recent IRI research shows that 92% of Boomers who own annuities have a higher confidence in the financial stability of their retirement compared to those who do not. The first quarter data shows that the peace of mind that only annuities can bring to a holistic portfolio is being increasingly recognized by those most in need of guaranteed retirement income - a trend that we expect to continue throughout the year."

Fixed annuity sales for the first quarter were $18.9 billion, up from $17.6 billion in the previous quarter, representing a 7% increase. Year-to-year quarterly sales of fixed annuities were up 6%, increasing from $17.9 billion in the first quarter of 2010.

"Fixed rate deferred annuity sales benefitted from a large bank channel increase by one carrier in particular," said Beacon President and CEO Jeremy Alexander.   "The quarter to quarter decline in income annuities was mainly seasonal.  Indexed annuities may have lost sales to variable annuities, because VAs have more upside potential in a rising stock market.  We think second quarter results may be strong as well.  But falling rates may dampen sales going forward."

Variable annuity sales for the first quarter were $39.2 billion, up 4% from $37.6 billion in the previous quarter. Year-to-year quarterly sales of variable annuities were up significantly, posting a 23% increase from first quarter 2010 sales of $31.8 billion. First quarter 2010 net sales were $5.8 billion. There were $26.2 billion in qualified sales and $13 billion in non-qualified in the first quarter.

"The upticks in both sales and net cash flow suggest growing momentum in variable annuity usage as Advisors continue to become more educated about the unique benefits of variable annuities and grow increasingly comfortable with them as an important component of a sustainable income producing portfolio," said Morningstar Director of Insurance Solutions Frank O'Connor. 

For additional data reporting, please access the PDF listed below.

About the Insured Retirement Institute: The Insured Retirement Institute (IRI) is a not-for-profit organization and is the authoritative source of all things pertaining to annuities, insured retirement strategies and retirement planning. IRI exists to vigorously promote consumer confidence in the value and viability of insured retirement strategies, bringing together the interests of the industry, financial advisors and consumers under one umbrella. IRI's mission is to: encourage industry adherence to highest ethical principles; promote better understanding of the insured retirement value proposition; develop and promote best practice standards to improve value delivery; and to advocate before public policy makers on critical issues affecting insured retirement strategies. Visit www.IRIonline.org to experience the new, vast resources of the new Insured Retirement Institute for yourself.

About Beacon Research: Beacon Research is an independent research company and application service provider founded in 1997 and based in Evanston, IL. Beacon tracks fixed and variable annuity features, rates and sales. Its quarterly Fixed Annuity Premium Study is the first and only source to analyze fixed annuity sales at the product level. Beacon lowers compliance risk and increases fixed annuity sales with 100% carrier-approved, comprehensive product profiles, spreadsheets and search tools for the advisor/rep websites of banks, TPMs, broker-dealers and marketing organizations. Financial institutions use its systems at www.annuitynexus.com for compliance review of 1035 exchanges, sales support, conservation and product research. Beacon also licenses information to other platforms, including Insurance Technologies' VisibleChoice^TM annuity sales platform, Ebix, Lipper, and Ibbotson Associates. Directly and through strategic alliances, Beacon information can be accessed by hundreds of financial institutions and thousands of advisors.

About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of Internet, software, and print-based products and services for individuals, financial advisors, and institutions. Morningstar provides data on approximately 350,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 4 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. The company has operations in 20 countries and minority ownership positions in companies based in two other countries. 

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