Variable Annuity Sales in U.S. Could Reach $500 Billion per Year by 2018

A 2008 sigma study from Swiss Re suggests that U.S. variable annuity sales could reach $400 - $500 billion per year by 2018.

These are gross sales projections that include exchanges of existing products.  Annuity exchanges are typically a significant portion of overall or gross sales.

This 2008 projection was based on compound annual growth projections of 7-9 percent.

Also mentioned was the fact that variable annuity assets in Japan grew at an astounding rate between 2003 and 2008--increasing at a 70 percent compound annual growth rate from 1.1 trillion JPY to 15.8 trillion JPY.

It should be noted that Swiss Re shut down its variable annuities and pension business in 2009--apparently in light of challenging market conditions and related increases in hedging costs.

Source: Swiss Re

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