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U.S. sales of individual annuities fell to $47 billion in the third quarter, down 13% from the total for the third quarter of 2016, according to LIMRA insurer survey data.
Results for the third quarter were worse than results for the second quarter: In the second quarter, annuity sales dropped 8%.
Regulatory uncertainty and low interest rates have pounded annuity sales over the past 18 months. Annuity sellers were hoping the modest 8% decrease in the second quarter was a sign the market was starting to recover.
(Related: Annuity Sales May Be Starting to Firm Up: Wink)
The annuity sales total for the third quarter is the lowest LIMRA has recorded since 2002.
Todd Giesing, a LIMRA annuity specialist, said in a statement about the latest results that they show early efforts to implement the U.S. Department of Labor’s fiduciary rule are still hurting annuity sales.
The department has delayed enforcement of rule-related procedural requirements, but the core impartial conduct standard took effect June 9, shortly before the beginning of the third quarter.
The regulatory shift had an especially negative effect on sales of annuities for use in individual retirement accounts (IRAs), Giesing said.
LIMRA and Wink
LIMRA is a nonprofit life insurance research consortium based in Windsor, Connecticut. Its third-quarter annuity sales total includes sales of both fixed annuities and variable annuities.
LIMRA’s third-quarter results are similar to results that Wink, a for-profit firm, reported last week for third-quarter sales of indexed annuities and other types of non-variable annuities.
(Related: Individual Annuity Sales Softened in Q3: Wink)
Wink found that third-quarter sales of non-variable annuities were down 11%, year-over year.
Second-quarter non-variable annuity sales were 9.3% lower than in the second quarter of 2016, according to Wink.
Sales of variable annuities fell 16%, year-over-year, and cut the variable annuity sales total to the lowest level in 20 years.
Here are some other third-quarter LIMRA results:
Sales of variable annuities for use outside of IRAs fell just 3%, but sales of variable annuities for use inside IRAs fell 24%.
Sales of structured variable annuities increased 15%, year-over-year, to $1.7 billion.
Sales of fee-based variable annuities increased 50%, to $560 million.
Sales of fixed annuities fell 11%, to $25 billion.
Sales of indexed annuities fell 9%, to $14 billion.
Sales of the new fee-based indexed annuities amounted to $48 million.
LIMRA has posted a complete vision of the annuity sales results here.
—Read Q1 Annuity Sales Fell 18%: IRI on ThinkAdvisor.
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