The life insurance and annuities sectors haven't had the easiest go of things in the time since the economic downturn began, but it seems that the latter took a fairly significant step forward in the second quarter of the year. Sales of all types of annuities skyrocketed between April and June, leading the industry to a level not seen in some time.
Total annuities sales during that time climbed to $61.4 billion, marking an increase of 8 percent on an annual basis, according to the latest data from LIMRA. In fact, over the entire first half of the year, the value of such products sold was actually up 10 percent.
Todd Giesing, a senior analyst for the LIMRA Secure Retirement Institute Annuity Research, noted that it's only the second time since the third quarter of 2011 that annuity sales have topped $60 billion in a three-month period, the report said. Much of this was driven by a move by consumers toward fixed annuities, specifically. What's interesting, and potentially important for the whole industry, is that this change actually came despite the fact that interest rates actually dropped for pretty much all of the first half of the year.
A closer look at the numbers
As for fixed annuities, their sales came to $25.2 billion in the second quarter, marking an increase of 34 percent from the same period a year earlier, the report said. That brought all fixed annuities sales through the end of the first half to $49.1 billion, and that number was up 39 percent. Meanwhile, sales of fixed rate deferred annuities were more or less in line with these, with quarterly increases of 30 percent, and a first-half jump of 42 percent, to $15.8 billion.
In addition, index annuities increased 40 percent for the quarter and 41 percent for the half, the report said. That quarterly hike actually marked an all-time record, with sales rising to $13 billion, and it's the first time ever that the this kind of product made up more than half of all fixed annuity sales, coming in at 52 percent. Giesing further noted that there's no indication that this kind of momentum should slow down any time soon.
This data may come as good news to those in the annuity business, because consumers clearly have an appetite for them once again after spending so many years being wary of this and other kinds of investment vehicles.