IRI Issues Second-Quarter 2015 Annuity Sales Report

Variable Annuity Sales Increase Sharply, VA Net Assets Approaching $2 Trillion Mark;
Fixed Indexed Annuity Sales Record Second Strongest Quarter Ever

WASHINGTON, D.C. – The Insured Retirement Institute (IRI) today announced final second-quarter 2015 sales results for the U.S. annuity industry, based on data reported by Beacon Research and Morningstar, Inc. Industry-wide annuity sales in the second quarter of 2015 reached $58.4 billion, a 10.8 percent increase from $52.7 billion in the first quarter of 2015, but a 2.5 percent decline from $59.9 billion in the second quarter of 2014.

Variable annuity total sales rose sharply in the second quarter of 2015 to $35.6 billion, according to Morningstar. This was an 11.7 percent increase from $31.8 billion in the first quarter of 2015 and virtually unchanged from the second quarter of 2014. Meanwhile fixed annuity sales totaled $22.8 billion in the second quarter of 2015, according to Beacon Research. This was a 9.5 percent increase from $20.9 billion during the previous quarter, but a 5.9 percent decline from $24.3 billion in the second quarter of 2014, when sales reached their highest level in five years.

“In recent years the second quarter has been particularly strong, and this year was no exception with both fixed and variable annuity sales posting large increases from Q1,” said Cathy Weatherford, IRI President and CEO. “As expected, slightly higher interest rates and continued consumer demand for lifetime income supported strong sales across the market during the second quarter. In the VA market, robust sales helped swing VA net flows back into positive territory, reversing the trend of the prior three quarters. Meanwhile, in the fixed market, indexed annuity sales saw their second best quarter on record.”  

According to Morningstar, variable annuity net sales were estimated to be $2.9 billion, returning to positive territory, as sales and additional premiums outpaced redemption activity. Variable annuity net assets also were up at the end of the second quarter of 2015. Variable annuity net assets were $1.98 trillion, a 1.8 percent increase from $1.95 trillion at the end of the first quarter of 2015 and a 2.5 percent increase from $1.93 trillion at the end of the second quarter of 2014. Within the variable annuity market, there were $23.2 billion in qualified sales and $12.4 billion in non-qualified sales during the second quarter of 2015.

“The second quarter jump in variable annuity sales was consistent across the board, with eight of the top 10 insurers posting sales gains in the second quarter compared with the first quarter,” said John McCarthy, Senior Product Manager, Annuity Products, for Morningstar. “While demand appears to be picking up, year-to-date sales are tracking slightly below last year’s levels, largely because of weaker equity market performance and historically low interest rates.”

[Click here to access complete variable annuity sales data in the PDF version of this release.]

According to Beacon Research, sales of all types of fixed annuities increased from the previous quarter, with fixed indexed annuities leading the way in terms of overall sales. Sales of fixed indexed annuities recorded their second best quarter of all time, totaling $12.6 billion. This was an 8.3 percent increase from first-quarter sales of $11.6 billion, and down just 2.7 percent from the all-time high of $12.9 billion set in the second quarter of 2014. For the entire fixed annuity market, there were approximately $13 billion in qualified sales and $9.8 billion in non-qualified sales during the second quarter of 2015.

“Overall sales were strong in Q2, with gains in all fixed product types,” Beacon Research President Jeremy Alexander said. “Fixed indexed sales led the pack, with close to a billion dollar increase from Q1. The growth in fixed indexed sales was strong across all distribution channels. Captive agents, wirehouses, independent broker-dealers, as well as banks and savings and loans reported record indexed sales with quarterly increases of 29 percent, 30 percent, 38 percent, and 12 percent, respectively.”

[Click here to access complete fixed annuity sales data in the PDF version of this release.]

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, and retirement plan providers and sponsors. Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement and management as of June 30, 2015. The company has operations in 27 countries.

About Beacon Research:
Beacon Research 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 a decade’s worth of sales information available to subscribers online at 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 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 can be accessed by 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 more than 30 organizations, and is the only association that represents the entire supply chain of 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

– END –

Andrew Simonelli

IRI Issues Second-Quarter 2015 Annuity Sales Report (PDF)