Sales of deferred annuities during the first quarter were up 6.8% to $84.7 billion from the fourth quarter and 41.9% when compared to the same period last year.
This is according to Wink Inc.'s first-quarter annuity sales report which includes participation from 104 annuity providers. The category includes variable annuity, structured annuity, indexed annuity, traditional fixed annuity and multi-year guaranteed annuity (MYGA) products.
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Sales of non-variable deferred annuities – including indexed annuities, traditional fixed annuities and MYGAs – were $62.9 billion during the first quarter, up 8.7% compared to the previous quarter and up 98.2% year over year. Meanwhile, sales of variable deferred annuities – including structured annuities and variable annuities – were $21.8 billion, up 1.6% from the previous quarter but down 22% compared with last year.
Indexed annuities logged a record quarter with sales of $22.6 billion, up 4.4% from Q4 2022 and up 35% from the first quarter of last year. Indexed annuities are tied to the performance of an external index such as Standard & Poor's 500.
Sales of traditional fixed annuities, which have a fixed rate guaranteed for one year only, were down 33.4% quarter over quarter to $382.9 million.
MYGA sales were up 173.4% to $39.9 billion year over year and up 12% compared with the previous quarter. MYGAs have a fixed rate guaranteed for more than 1 year.
"As long as CD rates remain so low, relative to annuity rates, you can count on indexed and MYG annuity sales being high," said Sheryl Moore, CEO of Wink and Moore Market Intelligence.
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Structured annuity sales were $9.6 billion, up 2.9% from the previous quarter and up 2.1% from the same period last year. Sales of variable annuities dropped 34.3% compared to the first quarter of 2022, although they were up half a percent to $121 billion when compared with the 4th quarter of 2022.
"Variable annuity sales likely have never been lower. Until the market turns around, the sales declines will continue," said Moore.
Kristen Beckman is a freelance writer based in Colorado. She previously was a writer and editor for ALM's Retirement Advisor magazine and LifeHealthPro online channel.
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