Indexed Annuities Hold Steady in 4Q 2007, but Sales of Indexed Life Soar |
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Written by U.S. Insurance News
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Monday, 03 March 2008 |
Sales of indexed annuities, including those registered as securities, were flat during 4Q 2007, but one industry analyst sees that as a reflection of the product’s strength.
The 42nd edition of the Advantage Index Sales & Market Report, which accounts for 99 percent of indexed annuity production from 56 annuity carriers, reports that total 4Q sales were $6.4 billion, virtually unchanged from 3Q sales. Compared with the same period last year, however, sales were up 7.6 percent.
“This is a great display of the industry’s strength, as cap, participation rates, and spreads have continued to be depressed for more than two straight quarters,” said Sheryl Moore, CEO of AnnuitySpecs.com and president of Advantage Group Associates, Inc. “For sales to end flat with where they were last year, that tells a great story about the power of downside guarantees and the increased interest in new benefits that offer guaranteed lifetime income without annuitization.”
Total sales of indexed annuities for 2007 were $25.1 billion, down just a half a percent from the previous year.
Allianz, the top carrier in the market, improved its market share to 23 percent. Its Endurance 15 product is now the top-selling indexed annuity, the first time that Allianz has had the top-selling product without a two-tiered design. Bank sales of indexed annuities have declined to just 3.2 percent of total sales, while career distribution sales have increased to 6.4 percent of the market.
The indexed life market proved far stronger. All thirty-three carriers in the indexed life market participated in the Advantage Index Sales & Market Report, representing 100 percent of production. Total 4Q 2007 sales were $162.6 million, shooting up 25.8 percent from 3Q sales. That marks an astonishing 60.7 percent increase over the same period last year.
“There has never been a more exciting time in the indexed life market,” Moore observed. “We had 11 carriers enter the market this year, and there are some ‘big boys’ about to get in. This means agent’s choices for their consumers are really opening up. It certainly is a great time to be selling these products!”
Total indexed life sales for 2007 were $512.2 million, up 39.3 percent.
American General moved to the top in the indexed life market, replacing Aviva, which had held the title since 2001.
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