Fixed Annuity Sales Hold Steady, Variable Sales Fall
WASHINGTON, D.C. – Sales of fixed and variable annuities were $52.6 billion in the first quarter of 2020, off 1.9 percent from fourth quarter 2019 sales of $53.6 billion, according to the Insured Retirement Institute (IRI), which today announced final first quarter 2020 market data for the U.S. annuity industry based on data reported by Beacon Annuity Solutions and Morningstar, Inc.
Total fixed annuity sales fell just 0.6 percent to $27.6 billion, as compared to $27.7 billion in the fourth quarter of 2019. Variable annuities fell 3.2 percent to $25.0 billion from $25.9 billion in the fourth quarter of 2019.
Book value fixed annuities fell 9.4 percent, while market value adjusted annuity sales rose 18.9 percent. Sales of fixed indexed annuities were virtually flat, showing a slight gain of 0.2 percent quarter over quarter. Income annuity sales saw the largest drop, falling 11.8 percent from fourth quarter levels.
Sales of variable annuities other than structured products (variable products that use index options to provide both upside potential and downside protection) fell 2.2 percent to $20.2 billion from fourth quarter sales of $20.7 billion, while structured annuities fell 7.4 percent to $4.8 billion from $5.2 billion.
In the fixed market, $15.6 billion of sales were in qualified plans and $11.9 billion were non-qualified. Variable annuities posted $15.3 billion on qualified sales and $9.7 billion in non-qualified.
According to Morningstar, variable annuity net assets sank 15.5 percent, falling to $1,704.7 billion from $2,018 billion at the end of the fourth quarter as COVID-19 roiled the equities markets. Equity funds, the second largest asset class, fell 24.4 percent. Net asset flows in variable annuities were -$20.1 billion in the first quarter.
Click [here] 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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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, 2020. 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 10 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.