In a bad year for annuities, these products are selling best

Some types of annuities are getting a lot of attention even though sales are down overall

August 27, 2020 By Emile Hallez

Although annuity sales have plummeted in 2020, at least two product types are faring better than ever.

Carriers sold $12.5 billion in multiyear guaranteed annuities during the second quarter, an increase of nearly 26% over sales in the second quarter of 2019, according to a report Wednesday from Wink. Sales in that category were down slightly, by 0.3%, during the first six months of the year, compared with the first half of 2019, due to much lower contract sales in the first quarter, Wink reported.

Another category doing well is structured annuities, also known as buffered annuities or registered index-linked annuities. Those products saw $4.5 billion in new sales during the second quarter, up more than 9% from the second quarter of 2019, according to Wink.

Insurers have increasingly looked to that category for growth – many have added products or entered the market for the first time this year. Consumers have gravitated toward structured annuities amid market volatility since the products provide a floor for losses and still offer growth potential tied to indexes.

Lincoln Financial dominated structured annuity sales in the second quarter with a market share of 23.4%, according to Wink. Lincoln’s Life Level Advantage B Share was the best-selling product in the category during the first and second quarter this year, the report noted.

Meanwhile, MassMutual was the top seller of multiyear guaranteed annuities, with a 20.3% market share, according to Wink. Other sales leaders were New York Life, Sammons Financial Cos., Global Atlantic Financial Group and Symetra Financial.

Multiyear guaranteed annuities are often compared to certificates of deposit, although the insurance products can have the benefit of tax deferred growth.

Overall, annuity sales came in 24% lower in the second quarter than the same period in 2019, at $48.8 billion compared to $63.9 billion, according to recent data from Limra’s Secure Retirement Institute. Fixed annuity sales fell by nearly 26%, while variable annuity sales came in about 20% lower.

The top seller overall was Jackson National Life, which pulled in nearly $8.5 billion in sales, nearly $7.3 billion of which was in VAs and $1.2 billion of which was in fixed annuities, according to a separate report this month from the Secure Retirement Institute.

While Jackson had the biggest VA sales, the top seller of fixed annuities was New York Life, which saw more than $5 billion in sales of those products.

Following Jackson in overall annuity sales during the second quarter were AIG ($7 billion), New York Life ($6.9 billion), Lincoln ($6.4 billion) and Equitable Financial ($5.3 billion), according to the Secure Retirement Institute. 

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