Indexed life & indexed annuities set consecutive sales records in 2012!
By Sheryl J. Moore
Moore Market Intelligence
Pleasant Hill, Iowa — March 18, 2013 — Forty-four indexed annuity carriers participated in the 62nd edition of AnnuitySpecs.com’s Indexed Sales & Market Report, representing 99% of indexed annuity production. Total fourth quarter sales were $8.4 billion, down 3.00% from the previous quarter. As compared to the same period last year, sales were up 2.00%. “Wow! Indexed annuity sales in 2012 set their fifth consecutive record.” exclaimed Sheryl J. Moore, President and CEO of Moore Market Intelligence, the firm that owns AnnuitySpecs.com. She added, “When you consider that record-low indexed annuity caps and rates have persisted, it’s hard to ignore that these sales records provide compelling evidence of consumers’ demand for retirement accumulation products with principal protection features. If such low interest rates persist, I project that indexed annuity sales will exceed fixed annuity sales by 2015.”
Worth noting this quarter was the fact that Allianz Life maintained their position as the #1 carrier in indexed annuities with a 14% market share. Security Benefit Life moved-up to take the position as the second-ranked company in the market, while American Equity, Aviva, and Jackson National Life rounded-out the top five, respectively. Security Benefit Life’s Total Value Annuity was the #1 selling indexed annuity for the second consecutive quarter.
Guaranteed Lifetime Withdrawal Benefit (GLWB) elections increased in the fourth quarter, while additional experience data pointed to trends in rider elections and income commencement. Moore pointed-out, “As one might expect, the greatest percentage of indexed annuity purchasers that elected GLWBs fall in the same age range as the typical indexed annuity purchaser: ages 60 – 69. However, it would not likely be anticipated that one of the greatest percentage of indexed annuity GLWB purchasers are commencing their lifetime income under the benefit between ages 60 – 69 as well.”
For indexed life sales, 48 insurance carriers participated in the AnnuitySpecs.com’s Indexed Sales & Market Report, representing over 99% of production. Fourth quarter sales were $430.8 million, an increase of nearly 34% as compared to the previous quarter. In contrast to the same period in 2011, sales were up more than 34%. Ms. Moore remarked, “This quarter was yet another record-setting quarter for indexed life sales.” She went on to comment, “It was also the third consecutive record-setting year for indexed life sales. When I projected sales to exceed $1.1 billion of target premium for 2012, I had little clue that they would overshoot my projections by this much! The interesting part of all of this is that while indexed life sales account for more than 1 out of 4 fixed universal life (UL) sales today, this number will only continue to increase.
Companies have already made product and pricing changes as a result of the steeper thresholds for AG38’s reserving requirements; numerous carriers have communicated that they will continue making similar changes.”
Items of interest in the indexed life market this quarter included Aviva retaining their #1 position in indexed life, with a 15% market share. Pacific Life maintained their position as the second-ranked company in the market, while AXA Equitable, National Western, and AEGON Companies rounded-out the top five companies, respectively. AXA Equitable’s Athena Indexed UL was the #1 selling indexed life insurance product for the seventh consecutive quarter. The average target premium on indexed life increased over 30% to $11,370.00 for the quarter.
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The staff of Moore Market Intelligence has combined experience of nearly three decades working with indexed insurance products. The firm provides services in speaking, research, training, product development, and marketing of indexed annuities and indexed life insurance. Their knowledge in product filing research and policy forms analysis, coupled with their unmatched resources in insurance distribution, give them the expertise to provide competitive intelligence that allows carriers to stay ahead of their competition.
About Sheryl J. Moore
Sheryl J. Moore is president and CEO of this specialized third-party market research firm and the guiding force behind the industry’s most comprehensive indexed life and indexed annuity due diligence tools, AnnuitySpecs.com and LifeSpecs.com. Ms. Moore previously worked as market research analyst for top carriers in the indexed life and annuity industries. Her views on the direction on the indexed< market are frequently heard in seminars and quoted by industry trade journals.
Ms. Moore is the author of the quarterly AnnuitySpecs.com’s Indexed Sales & Market Report. Serving as the insurance industry’s #1 resource of indexed insurance product sales since 1997, this report provides sales by product, company, crediting method, index, distribution, surrender charge period, and more.
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