EVANSTON, Ill., Nov. 30, 2011 (GLOBE NEWSWIRE) -- Third quarter 2011 income and indexed annuity sales topped the year-ago quarter according to estimates from the Beacon Research Fixed Annuity Premium Study. Income annuities advanced 5% to $2.2 billion, and indexed annuities inched up 0.4% to $9.0 billion. Indexed annuity sales were also up 7% from second quarter, while year-to-date income annuity results increased 3% to $6.3 billion.
"As we anticipated, these products continued to do well -- despite the quarter's low interest rate environment -- because of strong demand for guaranteed lifetime retirement income, be it the personal pension provided by income annuities or the lifetime withdrawal benefits offered by most indexed annuities," said Jeremy Alexander, CEO of Beacon Research.
Year-to-date 2011 sales fell 1% to $58.3 billion. Aside from the income annuity increase, there were small declines in indexed annuities (down 1% to $24.6 billion) and fixed rate non-MVAs1 (down 1% to $23.2 billion). Fixed rate MVA results dropped 15% to $4.2 billion.
Fixed annuity sales were $19.0 billion in third quarter, 7% below results in both the year-ago and prior quarters. Lower interest rates dampened sales of fixed rate annuities. Non-MVA sales of $6.5 billion fell 14% from a year ago and 21% from second quarter. MVAs posted $1.3 billion in sales, down 33% from third quarter 2010 and 15% from the prior quarter. Income annuity results declined 2% sequentially.
| Estimated Sales by Product Type (in $ millions) | |||||
| Total |
Fixed Rate Non-MVA |
Fixed Rate MVA |
Indexed | Income | |
| YTD 2011 | 58,300 | 23,213 | 4,235 | 24,578 | 6,260 |
| YTD 2010 | 58,780 | 22,990 | 4,990 | 24,729 | 6,069 |
| % change | -0.8% | 1.0% | -15.1% | -0.6% | 3.2% |
| Q3 '11 | 18,980 | 6,457 | 1,282 | 9,008 | 2,226 |
| Q3 '10 | 20,490 | 7,471 | 1,927 | 8,972 | 2,111 |
| % change | -7.4% | -13.6% | -33.4% | 0.4% | 5.4% |
| Q3 '11 | 18,980 | 6,457 | 1,282 | 9,008 | 2,226 |
| Q2 '11 | 20,410 | 8,178 | 1,506 | 8,438 | 2,280 |
| % change | -7.0% | -21.0% | -14.9% | 6.8% | -2.4% |
Each of third quarter's top five companies changed position from the prior quarter. Allianz regained sales leadership, moving Western National to second place. Both American Equity and Aviva moved up a notch to come in third and fourth, respectively. New York Life took fifth place. Third quarter results for the top five Study participants were as follows:
| Total Fixed Annuity Sales (in thousands) | |
| Allianz Life | 1,614,004 |
| Western National Life | 1,342,074 |
| American Equity | 1,267,361 |
| Aviva USA | 1,259,723 |
| New York Life | 922,021 |
Pacific Life was the new MVA sales leader. The other top companies in sales by product type were unchanged from the prior quarter: indexed – Allianz, fixed rate non-MVA – Western National, and; income – New York Life.
MassMutual took the lead in sales through independent broker-dealers. The other distribution channel leaders were unchanged. Western National was the leading bank channel carrier. New York Life led in captive agent and large/regional broker-dealer sales. USAA was the dominant direct/third party channel company. Allianz posted top independent producer sales. Pacific Life remained leader in wirehouses.
Each of third quarter's top five products were indexed annuities except for New York Life's Lifetime Income Annuity, which moved up one place to come in second. The Allianz MasterDex X remained the leading product. American Equity's Retirement Gold jumped two notches to come in third, followed by the company's Bonus Gold. Aviva rejoined the top five with Balanced Allocation Annuity 12 taking fifth place. The Study tracks the sales of some 600 fixed annuities.
| Rank | Company Name | Product Name | Product Type |
| 1 | Allianz Life | MasterDex X | Indexed |
| 2 | New York Life | NYL Lifetime Income Annuity | Income |
| 3 | American Equity | Retirement Gold | Indexed |
| 4 | American Equity | Bonus Gold | Indexed |
| 5 | Aviva | Balanced Allocation Annuity 12 | Indexed |
"We expect fourth quarter sales to decline due to seasonality as well as the difficult interest rate environment," Alexander concluded. "Beyond that, results aren't likely to improve much until rates rise. But, as always, a lot will depend on the decisions of the companies that issue and distribute fixed annuities."
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 MVAs or market value adjustments pay a premium on withdrawals when interest rates fall and reduce withdrawals when rates rise. Fixed rate non-MVAs are also known as book value annuities.