Annuity Sales Came on Strong in ’21

The year just past was a hard one in many ways—but it was a banner year for annuity sales, according to a recent report. 

In fact, 2021 was so good a year for annuity sales that they were not only 16% higher than those in 2020, but they were the highest since 2008, according to the Secure Retirement Institute (SRI). 

Annuity sales in the fourth quarter of 2021 came to $63.4 billion, 8% higher than those in the same period one year before. And for all of 2021, they amounted to $254.8 billion.

Variable Annuity Sales

Variable annuity sales showed similar vitality in 2021, SRI says. In the fourth quarter, they came to $32.3 billion, 17% higher than those of the same period in 2020. And for 2021 overall, variable annuity sales totaled $125.6 billion, up 27% from 2020. “In 2021, fee-based products experienced the largest gains as registered investment advisors and broker-dealers sought out tax-deferral solutions for their clients,” according to Todd Giesing, assistant vice president, SRI Annuity Research.

Fixed Annuities

Fixed annuity sales in the fourth quarter of 2021 came to $31.1 billion, just as they did in the fourth quarter of 2020. But they grew for 2021 overall, increasing by 7% and amounting to $129.2 billion.

Fixed indexed annuity sales grew in the fourth quarter, totaling $16.6 billion, up 18% increase from the same period in 2020. For the year, they came to $63.7 billion 15% higher than 2020. 

In the fourth quarter, fixed-rate deferred annuity sales were $11.3 billion,18% lower than those of the fourth quarter of 2020. But they grew for 2021, totaling $53.4 billion, 2% higher than in 2020.  

Why?

Giesing attributed the strong annuity sales in 2021 to the equity market. “Strong equity market growth in the fourth quarter and in 2021 propelled double-digit growth in both traditional variable annuity and registered index-linked annuity sales, resulting in strong year-over-year results,” he said.

Giesing said that “concern about potential changes to the tax code drove growth in investment-focused, non-qualified product sales” drove the variable annuity sales results. And regarding fixed indexed annuity sales, Giesing said, “Improved interest rates and product innovation around cap rates helped address the pricing challenges FIA carriers faced early in 2021, making the products more attractive to investors.”