Fixed Annuity Sales Flat, Variable Sales Jump
WASHINGTON, D.C. – Sales of fixed and variable annuities were $56.7 billion in the first quarter of 2021, up 3.9 percent from fourth-quarter 2020 sales of $54.5 billion, according to the Insured Retirement Institute (IRI). Final first-quarter 2021 results for the U.S. annuity industry are based on data reported by Beacon Annuity Solutions and Morningstar, Inc.
Total fixed annuity sales were nearly flat, falling just 0.1 percent to $27.49 billion compared to $27.52 billion in the fourth quarter of 2020. Variable annuities sales rose 8.0 percent to $29.2 billion from $27.0 billion in the fourth quarter of 2020.
Book value fixed annuity sales increased by 20 percent, while market value adjusted annuity sales came in just 0.7 percent higher. Sales of fixed indexed annuities fell 5.1 percent, and income annuity sales saw the largest drop in the fixed category, falling 13.9 percent from fourth-quarter levels.
Sales of variable annuities other than Registered Index-Linked Annuities (RILAs, which are structured variable products that use index options to provide both upside potential and downside protection) increased 7.5 percent to $20.0 billion from fourth-quarter sales of $18.6 billion. Structured annuities rose 9.2 percent to $9.2 billion from $8.4 billion in the fourth quarter of 2020.
In the fixed market, $14.4 billion of sales were in qualified plans, and $13.1 billion were non-qualified. Variable annuities posted $17.9 billion in qualified sales and $11.3 billion in non-qualified. Notably, non-qualified VA sales were up 10.9 percent quarter-over-quarter, while qualified sales only rose 6.3 percent.
According to Morningstar, variable annuity net assets were virtually flat at $2,104.1 billion versus $2,105.8 billion in the fourth quarter. Equity funds, the second-largest asset class, were up 1.5 percent over the fourth quarter but 45.8 percent higher than the first quarter of 2020, reflecting the strong recovery from the COVID-induced drop last year. Net asset flows in variable annuities were $24.8 billion in the first quarter.
Click for tables providing a detailed breakdown of annual and quarterly sales by annuity type and variable annuity assets by investment category.
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Contact: Dan Zielinski
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 products and services for individual investors, financial advisors, asset managers, retirement plan providers and sponsors, and institutional investors in the private capital markets. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $200 billion in assets under advisement and management as of March 31, 2021. The company has operations in 27 countries.
About Beacon Annuity Solutions: Beacon Annuity Solutions is an independent research company and application service provider founded in 1997 and based in Northfield, Ill. 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, and the first to make over 15 years of sales information available to subscribers online at www.annuitymarketstudy.com. 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. Carriers and 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. Directly and through licensees, Beacon information is accessible to hundreds of financial institutions and thousands of advisors.
About the Insured Retirement Institute: The Insured Retirement Institute (IRI) is the leading association for the entire supply chain of insured retirement strategies, including life insurers, asset managers, and distributors such as broker-dealers, banks, and marketing organizations. IRI members account for 90 percent of annuity assets in the U.S., include the top ten distributors of annuities ranked by assets under management, and are represented by financial professionals serving millions of Americans. IRI champions retirement security for all through leadership in advocacy, awareness, research, and the advancement of digital solutions within a collaborative industry community. Learn more at www.irionline.org.
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