WASHINGTON, D.C. – Sales of fixed and variable annuities were $60 billion in the second quarter of 2021, up six percent from first quarter 2021 sales of $56.7 billion, according to the Insured Retirement Institute (IRI), which today announced final second quarter 2021 market data for the U.S. annuity industry based on data reported by Beacon Annuity Solutions and Morningstar, Inc.
Total fixed annuity sales rose 12.1 percent to $30.8 billion, led by strong gains in traditional fixed and fixed indexed annuities, as compared to $27.5 billion in the first quarter of 2021. Variable annuities sales were almost flat, rising 0.2 percent to $29.23 billion from $29.17 billion in the first quarter.
Book value fixed annuity sales were responsible for the lion’s share of gains in the fixed category, rising 32 percent to $7.0 billion, while market value adjusted annuity sales fell 9.7 percent to $6.7 billion. Sales of fixed indexed annuities were solidly higher, growing 15.8 percent to reach $15.4 billion, and income annuity sales rose 17 percent from first quarter levels, reaching $1.8 billion for the second quarter.
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) fell 4.8 percent to $19.0 billion from first quarter sales of $20.0 billion, while RILAs rose 11.2 percent to $10.2 billion from $9.2 billion in the first quarter of 2021.
In the fixed market, $15.6 billion of sales were in qualified plans and $15.2 billion were non-qualified. Variable annuities posted $17.9 billion in qualified sales and $11.3 billion in non-qualified.
According to Morningstar, variable annuity net assets were down 1.2 percent to end the second quarter at $2,079.8 billion versus $2,104.1 billion the first quarter. Equity funds, the second largest asset class, were up 2.4 percent over the first quarter, but 24.5 percent higher than the second quarter of 2020, reflecting the strong recover of equity market from the COVID-induced drop last year. Net asset flows in variable annuities were -$18.5 billion in the second quarter, an improvement from the past two quarters when net asset flows were -$24 billion to -$25 billion.
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 June 30, 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 retirement income industry. IRI proudly leads a national consumer coalition of 40 organizations and is the only association that represents the entire supply chain f insured retirement strategies. IRI members are the major insurers, asset managers, broker-dealers/distributors, and 150,000 financial professionals. As a not-for-profit organization, IRI provides an objective forum for communication and education, and advocates for the sustainable retirement solutions Americans need to help achieve a secure and dignified retirement. Learn more at www.irionline.org.