Indexed Annuities, Indexed Life Sales Hit Record Highs

Fourth quarter sales 2015 of fixed indexed annuities (FIAs) soared to a record $15.5 billion. This marks a 30 percent increase compared with the year-ago period, according to Wink’s Sales & Market Report.

The hot-selling annuity category also finished 2015 at a record $53 billion in sales, an increase of 13 percent over 2014.

“We not only hit a record this quarter, but also for the year,” said Sheryl J. Moore, president and CEO of Moore Market Intelligence and Wink Inc., a database company which compiles sales statistics on life and annuity products.

Indexed annuities have been top sellers recently. Their popularity has risen as more retirees and preretirees in search of income find themselves drawn to an investment that offers exposure to market gains that track an index while protecting investors from any losses.

Factors expected to boost FIA sales include higher future interest rates, low current interest rates, lifetime income benefits and protection of principal, according to a report on FIA distribution trends published last year by the Insured Retirement Institute.

Record indexed annuity sales, published in the 74th Edition of Wink’s Sales & Market Report, were widely expected. In addition, data issued earlier this year from LIMRA Secure Retirement Institute showed record sales of indexed annuity products.

Wink’s Sales and Market Report compiled its indexed annuity data from 55 carriers representing 99.9 percent of indexed annuities distributed in the U.S.

In the fourth quarter, Allianz Life was the No. 1 carrier in indexed annuity sales with a market share of 14.5 percent. The company’s 222 Annuity was the top selling FIA for the fourth consecutive quarter, Wink also reported.

Allianz was followed by American Equity Companies, Nationwide, AIG and Great American Insurance Group.

Indexed Life Also Hits Record Highs

Fourth quarter indexed life insurance sales hit $542 million, an increase of 9 percent compared with the year-ago period, Wink reported.

Indexed life sales in 2015 were $1.86 billion, an increase of 4.38 percent over the previous record set in 2012, according to Wink.

“Like indexed annuities, indexed life hit a record for the quarter and the year,” Moore said in a news release. “It looks like AG 49 pushed indexed life more than 4 percent over their prior record sales.”

The National Association of Insurance Commissioners’ Actuarial Guideline 49 (AG 49) ushered in a new era.  AG 49 requires carriers to illustrate more accurately to agents and clients how indexed universal life (IUL) products perform over time.

AG 49 also slammed the brakes on wide interest rate differentials, also referred to as “loan arbitrage.” This played to the benefit of skilled agents, although not necessarily to the advantage of the client or investor.

In the fourth quarter, Transamerica was the No. 1 seller of indexed life products with a 14.1 percent market share, followed by Pacific Life. Trailing Pacific Life was National Life Group, Minnesota Life and Lincoln National Life.

Transamerica’s Premium Financial Foundation IUL was the No. 1 selling indexed life insurance product in the fourth quarter, Wink reported.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].

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Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].