Posted on June 27, 2020

Fixed Annuity Sales Hold Steady, Variable Sales Fall

Sales of fixed and variable annuities were $52.6 billion in the first quarter of 2020, off 1.9 percent from fourth quarter 2019 sales of $53.6 billion, according to the Insured Retirement Institute (IRI), which today announced final first quarter 2020 market data for the U.S. annuity industry based on data reported by Beacon Annuity Solutions and Morningstar, Inc.

Total fixed annuity sales fell just 0.6 percent to $27.6 billion, as compared to $27.7 billion in the fourth quarter of 2019. Variable annuities fell 3.2 percent to $25.0 billion from $25.9 billion in the fourth quarter of 2019.

Book value fixed annuities fell 9.4 percent, while market value adjusted annuity sales rose 18.9 percent. Sales of fixed indexed annuities were virtually flat, showing a slight gain of 0.2 percent quarter over quarter. Income annuity sales saw the largest drop, falling 11.8 percent from fourth quarter levels.

Sales of variable annuities other than structured products (variable products that use index options to provide both upside potential and downside protection) fell 2.2 percent to $20.2 billion from fourth quarter sales of $20.7 billion, while structured annuities fell 7.4 percent to $4.8 billion from $5.2 billion.

In the fixed market, $15.6 billion of sales were in qualified plans and $11.9 billion were non-qualified. Variable annuities posted $15.3 billion on qualified sales and $9.7 billion in non-qualified.

According to Morningstar, variable annuity net assets sank 15.5 percent, falling to $1,704.7 billion from $2,018 billion at the end of the fourth quarter as COVID-19 roiled the equities markets. Equity funds, the second largest asset class, fell 24.4 percent. Net asset flows in variable annuities were -$20.1 billion in the first quarter.

Click here for tables providing a detailed breakdown of annual and quarterly sales by annuity type, and variable annuity assets by investment category.

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Contact: Dan Zielinski