Industry Wide Annuity Sales Continue Double Digit Climb

VA Sales Up for 3rd Consecutive Quarter; Fixed Sales Rise Over Q1

WASHINGTON, D.C. - The Insured Retirement Institute (IRI) today announced second quarter results for the United States annuity industry. Annuity sales for the second quarter continued to increase at a double-digit rate.  Second quarter industry wide sales were $60.4 billion, up 10 percent from $55 billion in the second quarter of 2010. Second quarter sales also garnered quarter-to-quarter growth, increasing at a rate of 4 percent from $58.1 billion in the first quarter of this year.

"The second quarter data definitively show that this year will indeed be a record setting one for the industry," said IRI President and CEO Cathy Weatherford. "This expansive growth not only demonstrates the growing interest in insured retirement strategies, but also reflects the long-term confidence that investors are increasingly placing in these products."

Fixed annuity sales for the second quarter were $20.4 billion, up from $18.9 billion in the previous quarter, representing a 7.9 percent increase. Year-to-year quarterly sales of fixed annuities remained flat, with the second quarter of 2010 also coming in at $20.4 billion. Qualified sales were 32% of the second quarter 2011 total.

"The resiliency of second quarter's fixed annuity sales is remarkable, given that interest rates were below those of the year-ago or prior quarters," said Beacon Research President and CEO Jeremy Alexander. "Though rates have continued to decline, there has been a general flight to safety that may make third quarter another strong one for fixed annuities."

Variable annuity sales for the second quarter were $40 billion, up 2 percent from $39.2 in the previous quarter. Year-to-year quarterly sales of variable annuities posted a 15 percent increase from second quarter 2010 sales of $34.6 billion. Second quarter 2011 net sales were $5.7 billion. There were $26.6 billion in qualified sales and $13.4 billion in non-qualified in the second quarter.

"Variable annuity sales continued to trend upward, reaching the highest level since the second quarter of 2008 as continued concern about the direction of the economy and heightened market volatility appear not to have dampened investor enthusiasm for guarantees," said Morningstar Director of Insurance Solutions Frank O'Connor

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Industry Wide Annuity Sales Continue Double Digit Climb