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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