Second-quarter 2013 sales results for the U.S. annuity industry, based on data reported by Morningstar, Inc. and Beacon Research, reveal a 9.9% increase to nearly $54.5 billion from $49.6 billion for the previous quarter.
Year-over-year, however, that sales number is down 1.4% from $55.3 billion in the second quarter of 2012.
“Rising interest rates, along with the steepest yield curve in nearly two years, helped drive second-quarter fixed annuity sales growth,” says Beacon Research President Jeremy Alexander. “Strong demand and new product introductions boosted deferred income annuity sales nearly 40% from first quarter.
A week ago, IRI shared numbers emphasizing the success of deferred income annuities; now, variable and fixed annuities are in the spotlight, as each showed strong growth in the second quarter.
In fact, fixed annuity sales rose to their highest quarterly level since the fourth quarter of 2011. Sales totaled $17.14 billion, up 14.6% from just under $15 billion in the first quarter and up 0.2% from $17.10 billion in the second quarter of 2012, according to Beacon Research. Meanwhile, variable annuity total sales topped $37.3 billion in the second quarter of 2013, according to Morningstar. This is a 7.8% increase from $34.6 billion in the first quarter, but a 2.2% drop from nearly $38.2 billion in the second quarter of 2012.
“In previous quarters, demand for lifetime income was balancing headwinds from low interest rates,” says Cathy Weatherford, IRI President and CEO. “Now with rates rising, we are seeing sales swing upwards.”
Justin Stephani is Associate Editor for Insurance Networking News, a SourceMedia publication.
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