The annuity industry ended last year on “strong and secure footing,” where variable annuity assets reached an all-time high and fourth quarter sales showed the highest levels of last year, a report showed.
Cathy Weatherford
Variable annuity assets reached $1.5 trillion last year, according to the Insured Retirement Institute (IRI).
The institute said fourth quarter variable annuity sales were $37.6 billion, up 10% from the previous quarter. Year-to-year quarterly sales of variable annuities increased 18% from fourth quarter 2009 sales, the report showed.
Year-to-year quarterly sales of annuities rose 5.7%, from $51.3 billion in fourth quarter 2009, the IRI said.
“Variable annuity assets reached record levels…and 2009 sales of fixed annuities were near record setting,” said IRI President and CEO Cathy Weatherford in a statement. “As consumers increasingly turn to insured retirement strategies for guaranteed retirement income, 2011 will offer an unprecedented opportunity for the financial industry to help millions of Americans attain a secure financial future.”
Despite the strong performance of variable annuity sales, industry wide sales dropped to $209 billion compared to $229 billion in the previous year, according to the IRI.
The institute said fixed annuity sales dropped by 31.2% to $71.7 billion from the previous year.
“It appears that sales of fixed annuities fell relative to fourth quarter 2009 due to future interest rate expectations. Unlike the year-ago quarter, rates were rising in fourth quarter 2010,” said Jeremy Alexander, Beacon’s president and CEO. “In addition, the spread between corporate bond and Treasury rates narrowed sequentially… [making fixed annuity]…rates relatively less competitive…We expect that overall results will increase when the rate environment improves.”
Fourth quarter net sales last year were $5.4 billion, the IRI reported. There were $25.3 billion in qualified sales and $12.3 billion in non-qualified in the fourth quarter, the IRI said.
“Strong equity market performance combined with improving sales and net cash flow drove variable annuity assets above pre-financial crisis levels, and in fact to their highest level since Morningstar/VARDS began tracking variable annuity asset data in 1992,” said Frank O’Connor, director of insurance solutions for Morningstar.
‘Unprecedented’ opportunity for advisors as annuity assets reach all-time high via IFAwebnews.com .
No related posts.