Annuity Product Sales Trend Lines Start to Converge

New annuity sales figures show that clients are warming up a little to investment risk.

In spite of the ongoing war in Ukraine and the new conflict between Israel and Gaza, sales of U.S. individual deferred variable annuities rose 1% between the third quarter of 2022 and the third quarter of this year, to $24 billion, according to the latest issuer survey data from Wink.

That’s the first year-over-year increase in sales Wink has recorded for variable annuities since the fourth quarter of 2021, when rates on fixed annuities were near zero and the economy was emerging from the early COVID-19 pandemic freeze.

Wink’s variable category includes traditional variable annuity sales and registered index-linked annuities, or variable annuities that use investment indexes, rather than mutual funds, to power their investment option menus.

Overall individual deferred annuity sales increased 8.5%, to $79 billion.

What it means: Retirement savers seem to be hungrier for gains than they are scared of geopolitical risk.

Details: The new Wink numbers reflect survey responses from 124 annuity providers.

Here’s how sales for the annuities Wink follows changed between the third quarter of 2022 and the latest quarter:

• Multi-year guaranteed annuity contracts: $31 billion (up 12.9%)
• Registered index-linked annuities: $11.5 billion (up 12.5%)
• Non-variable indexed annuities: $23 billion (up 11%)
• Traditional fixed annuities: $496 million (up 9.9%)
• Traditional variable annuities: $12 billion (down 7.9%)

Although traditional variable annuity sales were down 7.9%, the year-over-year decreases ranged from 20% to 33% from the second quarter of 2022 through the second quarter of 2023.

Career and independent agents made 39% of all annuity sales included in the data; broker-dealers, 36.5%; and banks, 23%.

Fee-based products accounted for only 2% of all annuity sales in the data but 6.8% of the traditional variable annuity sales.

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