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Indexed annuities shatter sales record in 2Q 2014

Brian Anderson

Second-quarter 2014 sales of indexed annuities set a new record, eclipsing the 4Q 2013 record by nearly 9%, according to just-released figures from Wink’s Sales & Market Report.

“Never have indexed annuities experienced sales like this,” said Sheryl J. Moore, president and CEO of both Moore Market Intelligence and Wink, Inc. “And this is only the second quarter…wait until you see year-end sales!”

Total second quarter indexed annuity sales were $12.6 billion, up 15.43% when compared to the previous quarter, and up 36.54% when compared with the same period last year. Forty-five indexed annuity carriers participated in the 68th edition ofWink’s Sales & Market Report, representing 99.8% of indexed annuity production.

Noteworthy highlights this quarter, according to Moore, includeAllianz Life maintaining their position as the No. 1 carrier in indexed annuities, expanding its market share to 30.38%. Security Benefit, American Equity Companies, Great American Insurance Group, and Athene USA all sustained their positions, rounding out the top five. Allianz Life’s Allianz 360 Annuity was the No. 1 selling indexed annuity for the third consecutive quarter.

Guaranteed Lifetime Withdrawal Benefit (GLWB) utilization increased for the first time since the second quarter of 2013, while experience data pointed to trends in rider elections and income commencement. Moore pointed out, “Although there was a slight uptick in GLWB election rates, only a little more than half of all indexed annuity sales are focused on income as opposed to accumulation.”

Moore is the author of the quarterly Wink’s Sales & Market Report. Serving as the insurance industry’s No. 1 resource of indexed insurance product sales since 1997, this report provides sales by product, company, crediting method, index, distribution, surrender charge period, and more. For more information visit www.LookToWink.com.

On Aug. 18, LIMRA Secure Retirement Institute announced that total U.S. annuity sales reached $61.4 billion in the second quarter, improving 8% from the prior year. In the first six months of 2014, total U.S. annuity sales increased 10% compared to 2013.

“This is only the second time we have seen quarterly sales over $60 billion since the third quarter of 2011,” said Todd Giesing, senior analyst, LIMRA Secure Retirement Institute Annuity Research. “Despite declining interest rates during the first six months of this year, fixed annuity sales continue to drive overall annuity sales growth.”

Total fixed annuity sales were $25.2 billion in 2Q, up 34% from 2Q 2013. Year-to-date, fixed annuity sales are up 39%. LIMRA’s Secure Retirement Institute report said indexed annuity sales grew 40% in the second quarter, slightly more than Wink’s 36.54% figure, and also said the $13 billion in sales for the quarter was a new record. Giesing shares Moore’s optimism for the remainder of the year. “With a record quarter of index annuity sales driven by product innovation and expansion of distribution, combined with nothing to indicate that sales will significantly drop in the near future, sales may be pushing $50 billion for 2014,” Giesing said.

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