Multi-year Sales Highs, Record VA Assets
WASHINGTON, D.C. – Sales of fixed and variable annuities were $227.8 billion in 2019, 2.6 percent higher than sales in 2018 and the highest total since 2015, according to the Insured Retirement Institute (IRI), which today announced final 2019 market data for the U.S. annuity industry based on data reported by Beacon Annuity Solutions and Morningstar, Inc.
Total fixed annuity sales rose 3.6 percent to $129.5 billion, as compared to $125.0 billion in 2018. Variable annuities were up slightly, to $98.3 billion from $97.0 billion in 2018, a 1.3 percent gain for the year.
Fixed annuity sales results were mixed for the year, with book value fixed annuities made a strong showing in the 4th quarter, with sales increasing 38.0 percent to $5.7 billion from $4.1 billion in the 3rd quarter. For the year, market value adjusted fixed annuities were the best performing category, rising 25.4 percent to $19.9 billion in 2019 from $15.8 billion in 2018 on strong sales in the first half of the year.
Variable annuities posted a slight gain in 2019, rising 1.3 percent to $98.3 billion from $97.0 billion in 2018. Strong sales of structured variable annuities (variable products that use index options to provide both upside potential and downside protection), sales of which rose 58.2 percent to $17.5 billion in 2019 from $11.1 billion in 2018, drove the gains in variable annuities, which otherwise would have seen sales fall 6.0 percent year over year.
Variable annuities showed stronger sales throughout the year, with 4th quarter 2019 sales up a little less than 1.0 percent over 3rd quarter, and up 7.4 percent as compared to the 4th quarter of 2019.
Fixed indexed annuities gained 3.7 percent to $72.5 billion in sales versus $69.9 billion in 2018 but showed some weakness in the 4th quarter as sales fell 11.4 percent to $16.1 billion from 3rd quarter sales of $18.2 billion.
According to Morningstar, variable annuity net assets reached an all-time high at the end of 2019, rising 3.7 percent to $2,018 billion from $1,946 billion at the end of 2018.
Net asset flows in variable annuities were -$23.6 billion in the fourth quarter, and -$90.3 billion for the year. Within the variable annuity market, there were $62.8 billion in qualified sales and $34.0 billion in non-qualified sales in 2019.
The attached tables provide a complete 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 December 31, 2019. 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.