EVANSTON, Ill., Nov. 21, 2008 (GLOBE NEWSWIRE) -- U.S. sales of fixed annuities were an estimated $27.1 billion in third quarter, 2008 according to new data from the Beacon Research Fixed Annuity Premium Study, based on sales of 51 insurance companies representing an estimated 87% of the market.1 Overall quarterly sales were 54% above those of third quarter, 2007, up 10% from the previous quarter (which also set a record), and the highest since the Study began in 2003. On a year-to-date basis, total market sales were an estimated $70.6 billion, 50% above 2007's three-quarter total.
By product type, estimated sales in third quarter, 2008 were: book value2 - $13.5 billion; indexed - $6.9 billion; market value-adjusted (MVA) - $4.2 billion, and; immediate - $2.4 billion. These estimates reflect increases from third quarter, 2007 in all product types. Book value sales almost doubled. MVAs and immediates were up 53% and 43%, respectively. Indexed annuity results rose 9%. Compared to the previous quarter, there was double-digit growth in three product types: MVA - 17%, immediate - 15% and book value - 13%. Indexed sales were essentially flat (up 1%).
New York Life retained its overall sales leadership among Study participants. Third quarter results for the top 10 Study participants were as follows:
Total Fixed Annuity Sales
(in thousands)
--------------
New York Life 2,503,961
Aviva USA3 2,087,785
AEGON/Transamerica Companies (NYSE:AEG US) 1,766,167
AIG Annuity Insurance Co. (NYSE:AIG) 1,711,807
Allianz Life4 1,371,409
Jackson National Life 1,199,399
Allstate Financial (NYSE:ALL) 1,083,701
Principal Financial Group (NYSE:PFG) 1,025,753
Genworth Financial (NYSE:GNW) 726,673
In terms of sales by product type, New York Life remained the quarter's immediate annuity sales leader and also had top book value sales. Aviva continued to lead in indexed sales. Allstate Financial again had top MVA results.
The New York Life Fixed Annuity (a book value product) was the quarter's best-selling product. For the first time, Aviva placed second with Income Select Bonus, an indexed annuity. Transamerica Capital Builder 2007, a book value annuity issued by AEGON/Transamerica Companies, moved to third from fourth place. AIG Annuity's Flex 5 (another book value product) came in fourth, followed by Allstate Financial, which rejoined the top five with Allstate ChoiceRate (an MVA annuity). Third quarter results include sales of some 420 products.5
Rank Company Name Product Name Product Type
---- ------------ ------------ ------------
1 New York Life NYL Fixed Annuity Book Value
2 Aviva-American Income Select Bonus Indexed
Investors Life
3 AEGON/ Transamerica Book Value
Transamerica Cos. Capital Builder 2007
4 AIG Annuity Flex 5 Book Value
5 Allstate Financial Allstate ChoiceRate MVA
Three of these top products were also distribution channel bestsellers. New York Life had the leading bank product once again with its New York Life Fixed Annuity. Income Select Bonus reclaimed top honors in the independent producer channel for Aviva USA. Allstate ChoiceRate continued as the wirehouse leader. Another MVA annuity -- Protective Life's ProSaver Platinum(r) (NYSE: PL) -- remained the leading product among large/regional B-Ds. New York Life retained top captive agent honors with the New York Life Enhanced Fixed Annuity (a book value product). John Hancock (NYSE: MFC) retook independent B-D leadership with its GPA Plus (also a book value product).
Channel Company Product Product Type
------- ------- ------- ------------
Banks New York Life NYL Fixed Annuity Book Value
and S&Ls
Captive New York Life NYL Enhanced Fixed Annuity Book Value
Agents
Independent John Hancock GPA Plus Book Value
Broker-
Dealers
Independent Aviva-Am. Income Select Bonus Indexed
Producers Investors
Large/ Protective ProSaver Platinum MVA
Regional Life
Broker-
Dealers
Wirehouses Allstate Allstate ChoiceRate Annuity MVA
Financial
Throughout the quarter, credited rates of at least 5% were available on rate terms of five years or more. But there wasn't much reward for committing to interest guarantee periods longer than seven years. Consequently, sales of both book value and MVA annuities moved to rate terms of five to seven years. This pattern was especially clear in book value sales.
"Year to date, we've seen double-digit fixed annuity sales growth in all distribution channels and for all product types except indexed," said Jeremy Alexander, CEO of Beacon Research. "Third quarter conditions continued to be favorable. The interest rate environment gave fixed rate annuities a competitive advantage over conservative alternatives including bank certificates of deposit and Treasuries. The troubled equities markets prompted a pronounced flight to safety. Fourth quarter's economy suggests that fixed annuity sales should be even stronger , provided that risk- adverse consumers continue to feel safe entrusting their money to the life insurance industry despite the well-publicized problems of some companies."
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. The extent of Study participation is testimony to the need for this information.
About Beacon Research
Beacon Research is an independent research organization founded in 1997. It compiles market intelligence on fixed annuity products for subscribers to its web-based systems at www.annuitynexus.com. Carriers access these systems to support product development, rate setting and competition research. Distributors use them for product analysis and selection. The AnnuityNexus Sales Support System is an important resource for retention teams and sales desk staff throughout the distribution chain. Beacon also licenses information and software tools to other platforms, including websites for sales representatives and 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.
The Beacon Research logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=509
1 Sales figures include fixed rate (book value and MVA), indexed and immediate annuities. They do not include structured settlements. 2 Book value fixed annuities pay a declared rate of interest for a specified period. A market value adjustment (MVA) is not imposed if the holder withdraws assets before the end of the contract term. MVA products also pay a declared rate of interest for a specified period, and do impose such an adjustment. 3 Aviva USA is a subsidiary of Aviva plc (LSE:AV). 4 Allianz Life Insurance Company of North America is a subsidiary of Allianz AG (NYSE:AZ). 5 This total excludes immediate annuities.