Product Changes Spur Variable Annuity Sales

U.S. variable annuity sales grew by 24 percent from the same period a year earlier. Variable annuity sales for the first quarter of 2011 totaled $38.9 billion.

LIMRA reports that 16 of the top 20 variable annuity providers experienced sales growth relative to the previous year.

Prudential led the industry with a 40 percent increase and $6.81 billion in variable annuity sales in the first quarter.  Sales at MetLife increased 41 percent to $5.68 billion.

The strong sales results are attributed in part to rising equity markets. According to a Bloomberg article, another demand factor likely involves pending product changes that will make variable annuity terms less attractive:

“It’s reasonable to assume that a portion of our first- quarter sales represented accelerated purchases due to the anticipated product changeover,” Mark Grier, vice chairman of the Newark, New Jersey-based insurer, said on May 5 during a call with analysts to discuss first-quarter results.

Total annuity sales in the United States totaled $60 billion for January through March of 2011.  Fixed annuities grew five percent to $20.2 billion, while indexed annuity sales grew one percent to $7 billion.

Sources: LIMRA and Bloomberg


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