Assets in variable annuities reached an all-time high in the first quarter of the year. Cash inflows helped, but the high-flying stock market was the real reason the coffers bulged.
Assets in variable annuities climbed to $1.56 trillion during the first quarter, rising on market performance.
The first quarter's results are up from $1.4 trillion in the year-earlier period and mark the highest level recorded by Morningstar Inc., according to Frank O'Connor, director of insurance solutions.
Sales were also up for the first quarter, rising to $39.2 billion and reflecting a gain of 23% from the comparable period in 2010.
Strong market returns, rather than new sales of variable annuities, propelled asset levels, said Mr. O'Connor.
“The reality is that the overall market-based return for those assets is going to have a larger impact than the net cash flow,” he said. While assets amounted to $1.6 trillion, net flows were a fraction of that, at $5.8 billion in the first quarter.
Fixed-annuity sales were up a modest 6%, rising to $18.9 billion from $17.9 billion, according to Beacon Research Publications Inc.
Sales of fixed indexed annuities were up 5% from the first quarter of 2010, reaching $7.1 billion, according to data from AnnuitySpecs.com. Allianz Life Insurance Co. of North America held its position as the top seller of fixed indexed annuities, while American Equity Investment Life Holding Co. followed in second. Aviva USA, North American Co. for Life and Health Insurance and ING Groep NV followed in third, fourth and fifth places, respectively.