Annuity sales reached new heights in 2011
Annuity sales reached new heights in 2011
The promise of minimum guaranteed income in a challenging interest-rate environment drove increased annuity sales last year, according to two industry reports released today.
According to a survey by AnnuitySpecs.com, fourth-quarter 2011 sales of indexed annuities reached $8.2 billion, down less than 1 percent from fourth-quarter 2010. Total indexed annuity sales in 2011 were a record $32.3 billion, an increase of less than 1 percent from the previous year.
The 2011 sales figure was the fourth consecutive annual sales record for indexed annuities, said Sheryl Moore, president and CEO of Moore Market Intelligence, the Pleasant Hill-based parent company of AnnuitySpecs.com.
“When you consider today’s historical low rates on fixed money instruments, it seems inconceivable that fixed products would appeal to consumers at all,” Moore said in a release. “However, you must remember that the value proposition of these products is the minimum guarantee; this is the feature most attractive to savers.”
In a separate study, income annuity sales increased by nearly 18 percent in the fourth quarter of 2011 and nearly 7 percent for the year, according to estimates from the Beacon Research Fixed Annuity Premium Study. This growth gave that sector record-high 13 percent share of total fourth-quarter annuity sales. Indexed annuity results held their own, claiming a 48 percent share of the quarter’s sales, which was also a record high.
“Income annuities did remarkably well, considering that lower interest rates and a flatter yield curve reduced payouts,” said Jeremy Alexander, CEO of Beacon Research.
“Income annuities generally provide the most retirement income bang for the buck. Sales results indicate that advisers and their clients are becoming aware of how these products can be used to create a personal pension,” he said.
The promise of minimum guaranteed income in a challenging interest-rate environment drove increased annuity sales last year, according to two industry reports released today.
According to a survey by AnnuitySpecs.com, fourth-quarter 2011 sales of indexed annuities reached $8.2 billion, down less than 1 percent from fourth-quarter 2010. Total indexed annuity sales in 2011 were a record $32.3 billion, an increase of less than 1 percent from the previous year.
The 2011 sales figure was the fourth consecutive annual sales record for indexed annuities, said Sheryl Moore, president and CEO of Moore Market Intelligence, the Pleasant Hill-based parent company of AnnuitySpecs.com.
“When you consider today’s historical low rates on fixed money instruments, it seems inconceivable that fixed products would appeal to consumers at all,” Moore said in a release. “However, you must remember that the value proposition of these products is the minimum guarantee; this is the feature most attractive to savers.”
In a separate study, income annuity sales increased by nearly 18 percent in the fourth quarter of 2011 and nearly 7 percent for the year, according to estimates from the Beacon Research Fixed Annuity Premium Study. This growth gave that sector record-high 13 percent share of total fourth-quarter annuity sales. Indexed annuity results held their own, claiming a 48 percent share of the quarter’s sales, which was also a record high.
“Income annuities did remarkably well, considering that lower interest rates and a flatter yield curve reduced payouts,” said Jeremy Alexander, CEO of Beacon Research.
“Income annuities generally provide the most retirement income bang for the buck. Sales results indicate that advisers and their clients are becoming aware of how these products can be used to create a personal pension,” he said.
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