The number of new variable annuity products tripled in the second quarter, with lifetime guaranteed withdrawal benefits continuing to dominate the market.
The Insured Retirement Institute’s analysis found that 30 new benefits were filed in the second quarter over the 11 new variable annuity benefits filed in the first quarter.
“The upward trajectory of new variable annuity sales that propelled the industry into record territory has continued in earnest this year as product innovation made notable strides,” said IRI President and CEO Cathy Weatherford in a statement. “This historic growth attests not only to the unparalleled strength of the industry, but also to the financial security that only these strategies can bring to the millions of consumers who are planning for their retirement. Given the extensive development of living benefits, and contract fees remaining low, we will likely see an expanded reliance on guaranteed lifetime income strategies by investors in the second half of the year.”
Several new guaranteed minimum accumulation benefits were filed, and one major carrier made enhancements to its guaranteed minimum income benefit product.
Exactly 17 of the 23 living benefits released in the second quarter were designed as lifetime withdrawal riders, according to the nonprofit IRI.
Overall, carriers significantly expanded their product development activity in the second quarter, with 162 changes in the quarter, a 226% increase over the first quarter. Compared to the second quarter in 2010, product filings rose 110%. Product filings were spread among 24 carriers, with 16 choosing to issue new contracts or benefits.
Despite the notable expansion in product innovation this year, variable annuity contract costs have remained constant, according to the IRI. Total average expenses were 2.48%, compared to 2.49% last year, a figure that is consistent with the five-year average of 2.49%, the IRI analysis found.
This year’s first quarter, the latest for which 2011 flow data is available, shows variable annuity sales continued to climb, reaching $38.7 billion, up 23.2% over the first quarter of last year.
First quarter sales were also 4.3% higher than fourth quarter 2010 sales of $37.1 billion. In addition, assets under management posted another all time high of $1.56 trillion, a 3.6% increase over year-end assets, the IRI said.
Guaranteed products dominate as new variable annuity offerings triple via IFAwebnews.com .
No related posts.
Image may be NSFW.Clik here to view.
