Sales of annuities in the second quarter hit their highest level in three years.
According to the Insured Retirement Institute, annuity sales in the period amounted to $59.9 billion, based on data reported by Beacon Research and Morningstar Inc. That's a 6.8 percent increase from the first quarter's $56.1 billion and an even higher 9.9 percent increase from the second quarter of 2013, when sales totaled $54.5 billion.
IRI also said that, based on Beacon Research data, fixed indexed annuity sales not only reached a record but drove sales of fixed annuities higher, hitting $24.3 billion in the second quarter. That's up 7.6 percent from the year's first-quarter sales of $22.6 billion and a whopping 41.6 percent increase from Q2 2013 of $17.1 billion.
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Morningstar said that total variable annuity sales in Q2 2014 were $35.6 billion. That's up 6.2 percent from Q1's $33.5 billion, but down 4.6 percent from 2013's Q2 sales of $37.3 billion.
"These are the highest industrywide sales we've seen in three years, and on the fixed side of the market, the highest in five years," Cathy Weatherford, IRI president and CEO, said in a statement.
"We continue to see moderate growth, driven by consumer need for protection and income, in all types of retirement income products, and more robust growth in certain products based on the macroeconomic conditions of the day," Weatherford added.
"For example, the market is currently experiencing a surge in the sale of fixed indexed annuities that — in addition to offering upside potential with downside protection and access to guaranteed lifetime income — can be used by consumers as an alternative to traditional fixed income investments without the interest rate risk."
Beacon Research said fixed annuity sales were driven by a surge in fixed indexed annuity sales. Q2 2014 saw a new quarterly record of fixed indexed annuity sales of $12.9 billion, a 14.8 percent increase from Q1 and a 41.5 percent increase from Q2 2013 sales.
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