According to an industry survey, indexed annuities enjoyed record sales growth in 2010
Thirty-nine indexed annuity carriers participated in the 54th edition of AnnuitySpecs.com’s Indexed Sales & Market Report, representing 99% of indexed annuity production. Total fourth quarter sales were $8.3 billion, up 19% from the same period last year. As compared to the previous quarter, sales were down nearly 5%. “I predicted that we’d continue to see record sales of indexed annuities after the market collapsed in 2008, and I’m happy to see that has proven accurate- three years running!” Sheryl J. Moore, President and CEO of AnnuitySpecs.com told InsuranceNewsNet.com. “Now that indexed annuities account for 40% of all fixed annuities sold, insurance companies not offering these products won’t be able to turn away any longer, Moore continued.”
Indexed Annuity Defined
Indexed annuities are a fixed annuity, either immediate or deferred, that earns interest or provides benefits that are linked to an external equity reference or an equity index. The annuity's value could be tied to a stock or other equity index.
Indexed annuities are different from other fixed annuities because of the way it credits interest to your annuity's value. Some fixed annuities only credit interest calculated at a rate set in the contract. Other fixed annuities also credit interest at rates set from time to time by the insurance company.
The Annuity Market
Allianz Life has continued its tremendous success as the #1 annuity carrier in the market with a 23% market share. American Equity took the position as second-ranked company in the market, while Aviva, Jackson National and ING rounded-out the top five, respectively. Allianz Life’s MasterDex X is the #1 selling indexed annuity for the seventh consecutive quarter.
For indexed life sales, 37 insurance carriers in the market participated in the AnnuitySpecs.com’s Indexed Sales & Market Report, representing 99% of production. Fourth quarter sales were $221.2 million, an increase of more than 33% from the previous quarter and an increase of more than 36% over the same period in 2009. Moore remarked, “I am almost speechless over the fact that indexed life is now over-selling variable UL!”
Who are the Indexed Annuity Sales Leaders?
Items of interest in the indexed life market this quarter include Pacific Life maintaining their #1 position in the market with an 18% market share. Aviva is second in the market, while Minnesota Life, Penn Mutual and National Life Group complete the top five, respectively. Pacific Life’s Pacific Indexed Accumulator III remained the top-selling indexed life product for the fourth consecutive quarter.
