Facing unprecedented long-term market volatility in 2022, consumers sought the protection offered by fixed annuities, propelling a record-high $312.8 billion in total U.S. annuity sales. According to LIMRA’s 2022 Individual Annuity Sales Survey, total 2022 annuity sales increased 23% over 2021 results and were 18% higher than the previous record of $265 billion set in 2008.
“The interest rate dip in December spurred investor demand looking to lock in the favorable rates before they dropped further,” said Todd Giesing, assistant vice president, LIMRA Annuity Research. “As a result, total fourth quarter annuity sales marked a new record of $89.4 billion, a 42% increase from the fourth quarter of 2021. LIMRA data show there was an 80% year-over-year increase in pending total annuity contracts in January 2023. LIMRA expects the sales momentum experienced in 2022 to continue and is forecasting a record-breaking first quarter 2023.”
In the fourth quarter, bank sales more than doubled (117%) to $21.8 billion. In 2022, bank sales were a record $73.7 billion, 69% higher than in 2021. This is the first time banks have led total annuity sales since 2004, accounting for 24% of the U.S. annuity market in 2022.
“Banks, which traditionally attract more conservative investors, drove the growth that resulted in record-high fixed-rate deferred (FRD) sales,” said Giesing. “Throughout 2022, short-term FRD crediting rates outpaced comparable CD rates, making them appealing to investors seeking guaranteed growth and protection.”
Fixed-rate deferred annuity sales were $38.4 billion in the fourth quarter, 249% higher than fourth-quarter 2021 sales. For the year, fixed-rate deferred annuities totaled $113 billion, more than double (113%) the sales in 2021. FRD sales represented 36% of the total individual U.S. annuity market. The record demand in December spilled into the new year. LIMRA research shows a 315% year-over-year increase in pending FRD contracts in January 2023, LIMRA is forecasting record FRD sales in the first quarter of 2023.
Fixed indexed annuity (FIA) sales also had a record quarter and year. In the fourth quarter, FIA sales were $22.3 billion, a 34% increase from the prior record set in the fourth quarter 2021. For the year, FIA sales were $79.8 billion, up 25% from 2021, and 9% higher than the record set in 2019.
Income annuity sales spiked in fourth quarter 2022 as fluctuating interest rates drove investors to lock in favorable payout rates. Single premium immediate annuity (SPIA) sales were $3.2 billion in the fourth quarter, a year-over-year increase of 88%. In 2022, SPIA sales were $9.2 billion, 44% higher than 2021 results. Deferred income annuity (DIA) sales jumped 67% to $720 million. For the year, DIA sales were $2.1 billion, up 13%. LIMRA forecasts income annuity sales to experience steady growth through 2026.
Registered index-linked annuity (RILA) sales were $10.1 billion in the fourth quarter, down 2% from the fourth quarter 2021. Despite lower fourth-quarter results, total RILA sales reached $41.1 billion in 2022, 6% higher than prior year and a new all-time high for the product line’s sales.
Traditional variable annuity (VA) sales continued to tumble. In the fourth quarter, traditional VA sales fell 41% to $12.7 billion. In 2022, traditional VA sales totaled $61.8 billion, down 29% from 2021 results. Given the current economic forecast and competitive pressures, there is little expectation that sales will improve significantly over the next several years.
- To view the top 20 rankings of total, variable and fixed annuity writers in 2022, see 2022 Total Annuity Rankings.
- To view the top 20 rankings of traditional VA and RILA sales leaders in 2022, visit 2022 Variable Annuity Breakout Rankings.
- For the 2022 top 20 rankings of fixed-rate deferred, fixed indexed and payout annuity writers, visit 2022 Fixed Annuity Breakout Rankings.
Fourth quarter 2022 annuities industry results are based on LIMRA’s quarterly annuity sales survey, which represents 89% of the total market.
Serving the industry since 1916, LIMRA helps to advance the financial services industry by empowering nearly 700 financial services companies in 53 countries with knowledge, insights, connections, and solutions. Visit LIMRA at www.limra.com.