EVANSTON, Ill., March 8, 2011 (GLOBE NEWSWIRE) -- Fixed indexed and income annuities broke sales records in 2010, according to the Beacon Research Fixed Annuity Premium Study.1 Annual indexed annuity results climbed 6% to an estimated $31.4 billion. Income annuity sales grew 2% to $8 billion. Each product type also claimed its largest share of sales in the Study's 8-year history – 48% for indexed and 11% for income annuities.
"Both product types benefitted from growing interest in guaranteed lifetime retirement income and protection from downside risk," said Jeremy Alexander, CEO of Beacon Research.
Fourth quarter indexed annuity sales were an estimated $8 billion, 16% ahead of fourth quarter 2009. Income annuity sales of $1.9 billion advanced 4% from the year-ago quarter. Indexed and income annuity sales fell quarter-to-quarter by 7% and 11%, respectively.
Total U.S. sales of fixed annuities were an estimated $71.7 billion in 2010. These results were 31% below 2009, the second-strongest year in the Study's 8-year history. Estimated fourth quarter sales of $16.7 billion slipped about 14% compared to both the year-ago and prior quarters.
Fixed rate annuity results were negatively affected by 2010's unfavorable interest rate environment. Annual book value sales dropped 49% from 2009 to an estimated $26.5 billion, while market value-adjusted products slid 61% to $5.8 billion.2 Fourth quarter's book value sales were $5.6 billion, down 38% and 19% from the year-ago and prior quarters, respectively. MVAs fell 29% relative to both periods, to $1.3 billion.
Allianz led sales for the second consecutive quarter.3 American Equity moved up two notches to come in second, replacing Aviva,4 which came in fourth. New York Life continued in third place. Western National rejoined the top five in fifth place.5 Fourth quarter results for the top five Study participants were as follows:
| Total Fixed Annuity Sales (in thousands) | |
| Allianz Life | 2,003,961 |
| American Equity Investment Life Insurance Co | 1,554,401 |
| New York Life | 1,340,157 |
| Aviva USA | 1,334,859 |
| Western National Life | 1,095,346 |
Western National once again traded places with New York Life to become the quarter's top company in book value annuity sales. Allianz continued as the dominant issuer of indexed annuities, and New York Life remained the long-time leader in income annuity sales.
Three of these companies also were distribution channel leaders. Allianz had top sales through independent agents. New York Life was the dominant company in the career agent and large/regional broker-dealer channels. Western National led in bank channel sales. The remaining channel leaders were: MassMutual, independent broker-dealers; Pacific Life, wirehouses; and USAA, direct/third party.
Of the 500 products tracked by the Study, both Allianz and American Equity had two indexed annuities in the top five. The Allianz MasterDex X was the quarter's bestseller again, while Endurance Plus came in fifth. American Equity's Retirement Gold moved up a notch to take second place and its Bonus Gold placed fourth. The New York Life Lifetime Income Annuity advanced one notch to come in third.
| Rank | Company Name | Product Name | Product Type |
| 1 | Allianz Life | MasterDex X | Indexed |
| 2 | American Equity | Retirement Gold | Indexed |
| 3 | New York Life | NYL Lifetime Income Annuity | Income |
| 4 | American Equity | Bonus Gold | Indexed |
| 5 | Allianz Life | Endurance Plus | Indexed |
The New York Life Preferred Fixed Annuity was the new bank channel bestseller. In the large/regional B-D channel, The New York Life Secure Term Fixed Annuity replaced another New York Life product. The other channel-leading products were repeat performers.
| Channel | Company | Product | Product Type |
| Banks and S&Ls | New York Life | NYL Preferred Fixed Annuity | Book Value |
| Captive Agents | New York Life | NYL Lifetime Income Annuity | Income |
| Direct/Third Party | USAA | Flexible Retirement Annuity | Book Value |
| Independent Broker-Dealers | MassMutual | RetireEase | Income |
| Independent Producers | Allianz Life | MasterDex X | Indexed |
| Large/Regional Broker-Dealers | New York Life | NYL Secure Term Fixed Annuity | Book Value |
| Wirehouses | Pacific Life | Pacific Frontiers II | MVA |
Fourth quarter's interest rate environment was a difficult one for fixed annuity sales. Although rates increased, the fixed annuity rate advantage diminished, and rising rate expectations were a disincentive to buy. Those who did purchase fixed annuities chose shorter rate terms to avoid locking in fourth quarter's rates for longer periods.
"Consumer demand for conservative investments with guarantees continues to be very strong," commented Alexander. "We expect fixed annuity sales growth to resume when the rate environment becomes more favorable."
About the Beacon Research Fixed Annuity Premium Study
The quarterly Study is the first and only source to track and analyze product-level fixed annuity sales on an ongoing basis. Providing timely market intelligence of the highest quality, it's designed to report what's moving in each channel and why.
About Beacon Research
Beacon Research tracks fixed, indexed and variable annuity sales, rates and features, and provides web-based systems at www.annuitynexus.com for distributors and insurance companies. Beacon also licenses information and software tools to other platforms, including EbixExchange's AnnuityNet annuity automation platform. Beacon's fixed annuity benchmark series -- the industry's first -- is available through Ibbotson Associates. Directly and through strategic alliances, Beacon information can be accessed by hundreds of financial institutions and distributors.
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1 Sales figures do not include structured settlements or employer-sponsored retirement plans.
2 Book value fixed annuities do not impose a market value adjustment (MVA) if the owner withdraws assets before the end of the contract term. MVA products do impose such an adjustment. Both book value and MVA annuities pay a declared rate of interest for a specified period.
3 Allianz Life Insurance Company of North America is a subsidiary of Allianz AG.
4 Aviva USA is a subsidiary of Aviva plc.
5 Western National is a subsidiary of American International Group.