WASHINGTON, D.C. – Sales of fixed and variable annuities were $57.8 billion in the third quarter of 2021, down 3.7 percent from second quarter 2021 sales of $60.0 billion, according to the Insured Retirement Institute (IRI), which today announced final third 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 fell 8.9 percent to $28 billion as book value and market value adjusted annuities sales fell, though both fixed indexed and income annuities showed gains. Variable annuities sales rose slightly, up 1.7% percent to $29.7 billion from $29.2 billion in the first quarter. Despite an overall drop in sales in the third quarter, on a year-to-date basis total annuity were up 2.8%, to $157.3 billion from $153.0 billion as of the third quarter of 2020.
Book value fixed annuity fell 19.5 percent to $5.6 billion, while market value adjusted annuity sales fell 31.4 percent to $4.6 billion. Sales of fixed indexed annuities fared better, rising 4.1 percent to $16.0 billion, and income annuity sales rose 4.9 percent from second quarter levels, reaching $1.9 billion for the third 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) rose 7.0 percent to $20.4 billion from second quarter sales of $19.0 billion, while RILAs fell 8.0 percent to $9.4 billion from $10.2 billion in the second quarter of 2021.
In the fixed market, $15.0 billion of sales were in qualified plans and $13.1 billion were non-qualified. Variable annuities posted $18.0 billion in qualified sales and $11.7 billion in non-qualified.
According to Morningstar, variable annuity net assets were down 1.3 percent to end the third quarter at $2,069.5 billion versus $2,079.8 billion in the second quarter. Equity funds, the second largest asset class, were down 1.3 percent over the second quarter, but still 15.7 percent higher than the third quarter of 2020, continuing to reflect the strong recover of equity markets from the COVID-induced drop last year. Net asset flows in variable annuities were -$20.8 billion in the third quarter, reflecting a modest increase in outflows compared to the second quarter, but still below first quarter net asset flows were -$24.8 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 entire supply chain of insured retirement strategies, including life insurers, asset managers, broker-dealers, banks, marketing organizations, law firms, and solution providers. IRI members account for 90 percent of annuity assets in the U.S., include the foremost distributors of protected lifetime income solutions, 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.