Index annuity sales rose during the second quarter, hitting $8.3 billion, according to data from Advantage Group Associates Inc.
Index annuity sales rose during the second quarter, hitting $8.3 billion, according to data from Advantage Group Associates Inc.
That’s an increase of 21.2% from the year-ago period and a gain of 18.3% from the first quarter’s results of $7 billion, according to the Pleasant Hill, Iowa-based research firm.
The boost in sales occurred despite a period in which carriers tried to pull back on sales by reducing commissions, lowering the number of agent appointments and cutting off relationships with distributors — all in the name of conserving capital.
“The reason sales increased so dramatically is mostly because of folks who are looking for retirement income losing their values in variable annuities and other securities products, as well as the decline of the equities markets,” Sheryl Moore, president of Advantage Group Associates, said in an interview.
“They want to maintain the value they still have. They want products with safeties and guarantees,” Ms. Moore added. “People don’t want to lose any money, so they go into fixed annuities to preserve principal.”
During the quarter, Aviva USA Corp. of Des Moines, Iowa, held on to its position as the No.1 seller of index annuities, garnering 20% of the market share.
Meanwhile, Minneapolis-based Allianz Life Insurance Co. of America’s MasterDex X is the top-selling index annuity, according to Advantage Group Associates.
On the index life sales side, second-quarter sales were up to $132.4 million, a 26% gain from the past quarter and a 3% rise from the comparable period in 2008.
In this category, Aviva also had a firm foothold in the No. 1 issuer spot, with 21% of the market share. Meanwhile, Pacific Life Insurance Co. of Newport Beach, Calif., was the manufacturer of the No. 1 selling index life product, the Indexed Accumulator III.
About 47% of the index life sales involved contracts that spanned nine to 10 years.
