Variable Annuity Sales Climb 19%: Wink

Sales of non-variable annuities went in a different direction.

By Allison Bell | May 25, 2020 at 01:22 AM

Credit: Wink)

U.S. sales of individual deferred annuities fell to $53 billion, down 4% from the total for the first quarter of 2019, according to new issuer survey data from Wink Inc.

Sheryl Moore, president of Wink, said in a comment included in an announcement of the results that she thinks they look surprisingly good.

“It is amazing that annuity sales are only down in the single digits, given the devastating effects that COVID-19 has wreaked on the annuity industry,” Moore said.

Resources

·        A copy of Wink’s latest survey summary is available here.

·        An article about the Wink numbers for the fourth quarter of 2019 is available here.

·        An article about structured annuities is available here.

Sales of three kinds of non-variable annuities Wink tracks fell about 19%, to $27 billion.

Sales of one type of variable annuity, structured annuities, grew the most, and sales of a type of fixed annuity, multi-year guaranteed annuity (MYGA) contracts, fell the most, according to the Wink survey data.

A structured annuity is a variable annuity contract that gives the holder a predetermined amount of protection against loss of principal, rather than a promise of full protection against loss of principal.

A MYGA annuity contract provides a set crediting rate guarantee for a specified number of years.

Wink now has data from 12 structured annuity issuers, 47 variable annuity issuers, 48 fixed annuity issuers, 61 indexed annuity issuers, and 68 MYGA issuers.

The third quarter ended March 31. Many states began imposing work-from-home rules and other COVID-19-related activity restrictions in the middle of March.

Here’s a look at how sales of the types of annuities Wink tracks changed between the first quarter of 2019 and the latest quarter:

·        Traditional fixed annuities: $691 million (down 27%)

·        Indexed annuities filed as non-variable contracts: $16 billion (down 7.4%)

·        Multi-year guaranteed annuity (MYGA) contracts: $9.9 billion (down 32%)

·        Variable annuities, other than structured annuities: $21 billion (up 16%)

·        Structured annuities: $4.8 billion (up 38%

Publicly traded annuity issuers said when they released their earnings reports for the first quarter that the drop in interest rates hurt sales of fixed products, by causing the issuers to cut crediting rate guarantees and, in some cases, to emphasize sales of products without return guarantees.

Allison Bell, ThinkAdvisor's insurance editor, previously was LifeHealthPro's health insurance editor. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached at abell@alm.com or on Twitter at @Think_Allison.

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