An interesting article from Darla Mercado at Investment News discusses a recent report on the U.S. variable annuity industry from Cerulli Associates.
While no secret to industry analysts, the report provides a reminder that the vast majority of variable annuity sales in the United States are exchanges of existing products.
The result is a sort of recycling of variable annuity assets rather than net inflows of new assets into the industry.
Also surprising is the fact that gross sales of variable annuities in the United States have grown at a compound annual rate of 2 percent since 2001.
Gross variable annuity sales in the U.S. during 2010 were $138 billion, while gross sales in 2001 were $113 billion.
The Cerulli report highlights some of the challenges facing the variable annuity industry in its pursuit of organic growth, and these challenges exist despite the support of some of the most attractive structural trends of any industry in the world.
Source: Investment News
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