Annuities Post Highest Sales Since 2008
WASHINGTON, D.C. – Sales of fixed and variable annuities were $233.1 billion in 2021, an increase of 12.3 percent over 2020 sales of $207.5 billion and the highest annual annuity sales since 2008, when annuity sales reached an all-time high of $261.5 billion, according to the Insured Retirement Institute (IRI), which today announced final 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 2.1 percent to $114.1 billion as strong fixed indexed sales offset flat book value and lower sales of market value adjusted annuities. Variable annuities sales rose 24.2% to $119.0 billion from $95.8 billion in 2020.
Book value fixed annuity sales in 2021 were flat year-over-year at $24.5 billion, while market value adjusted annuity sales fell 8.5 percent to $22.4 billion. Sales of fixed indexed annuities drove the slight overall gain in fixed annuity sales, rising 8.7 percent to $60.2 billion for the year. Income annuity sales fell 5.1 percent to $7.0 billion.
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 11.2 percent to $79.9 billion. Still, the growth driver in 2021 for variable annuities was RILAs, sales of which grew 63.3 percent to $39.1 billion from $24.0 billion in 2020.
$59.0 billion of sales were in qualified plans in the fixed market, and $55.1 billion were non-qualified. Variable annuities posted $72.2 billion in qualified sales and $46.8 billion in non-qualified.
According to Morningstar, variable annuity net assets rose 1.2 percent to end the fourth quarter at $2,130.4 billion versus $2,105.8 billion at the end of 2020. Equity funds, the second-largest asset class, were up 8.2 percent over the second quarter, reflecting the strong recovery of equity markets from the COVID-induced drop in 2020. Net asset flows in variable annuities were -$86.4 billion in 2021 versus -$75.9 billion in 2020.
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 December 31, 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.