Individual Annuity Sales Softened in Q3: Wink

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U.S. sales of individual indexed annuities and other non-variable annuities were a little softer in the third quarter than they were in the second quarter.

Non-variable annuities generated about $20 billion in sales in the third quarter, down 11% from the total for the third quarter of 2016, according to the latest Sales & Market report from Wink.

In the second quarter, sales of non-variable annuities were 9.3% lower than in the second quarter of 2016.

(Related: Annuity Sales May Be Starting to Firm Up: Wink) 

Sales of indexed annuities fell 10.5%, year-over-year, to about $13 billion.

In the second quarter, sales of indexed annuities were down just 5.6%.

Agents who sold indexed annuities received commissions averaging 4.95% of the premiums for the third quarter, according to Wink. That average was down from 5.38% for the third quarter of 2016.

The insurers participating in the latest Wink market survey included 53 providers of indexed annuities, and 57 providers of annuities offering multi-year crediting rate guarantees.

The U.S. Department of Labor began taking formal steps to postpone enforcement of the DOL fiduciary rule and related sales standards during the third quarter. 

Even though non-variable annuity sales fell in the second quarter, year-over-year, the drop was narrower than in previous quarters. Annuity sellers were hoping reduced pressure from fiduciary rule confusion might be helping to firm up the market.

In the third quarter, however, banks increased the rates they were offering on certificates of deposit, and bank CDs took business away from annuity issuers. “There is typically an inverse relationship between sales of fixed and indexed annuities, as compared to CD rates,” according to Sheryl Moore, the president of Wink.

—Read Q1 Annuity Sales Fell 18%: IRI on ThinkAdvisor.

— Connect with ThinkAdvisor Life/Health on Facebook and Twitter.

A firm analysis shows the top-yielding 5-year fixed annuity pays 3.15%.

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