Data and Research July 22, 2022

Annuity Sales Spike in Second Quarter

Fixed annuity products propelled growth for the period.

Reported by

Investors seeking investment protection and steady asset growth have driven annuity sales higher, LIMRA Secure Retirement Institute sales data show.  

Annuity sales increased 22% to $77.5 billion in the second quarter, according to preliminary results from LIMRA’s U.S. Individual Annuity Sales Survey. This is the highest quarterly sales ever recorded since LIMRA began tracking annuity sales, and nearly $9 billion above the previous record, which was set in the fourth quarter of 2008 during the Great Recession.

Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.

“Continued equity market declines and rising interest rates drove investors to purchase record-level fixed-rate deferred annuities in the second quarter,” Todd Giesing, assistant vice president, LIMRA annuity research, stated in a release. “Our research shows fixed-rate deferred annuity manufacturers are, on average, offering interest rates more than four times that of a bank CD, which has made these products a tremendous value for investors looking for protection and growth potential.”

The data show that overall fixed-rate deferred annuity sales were $28.2 billion in the second quarter, 76% higher than 2021 Q2 sales. According to LIMRA, this is the highest sales quarter for fixed-rate deferred annuities ever recorded. In the first six months of 2022, fixed-rate deferred annuity sales totaled $44.1 billion, a 44% increase from the same period in 2021.

Fixed indexed annuity sales also had a strong showing in Q2 as sales were $19.7 billion in the period, up 19% from the prior year. Year-to-date sales were $36 billion, a 20% increase from last year, LIMRA found.

“Both FIAs and fixed-rate deferred products benefited from the significant interest rate increases in the second quarter,” Giesing said in the release. “Coupled with a nearly 20% equity market decline, investors sought out principal protection and growth potential, which these products offer.”

Volatile market conditions affected traditional variable annuity sales, data show.

For example, in Q2 sales fell 32% to $15.4 billion, the lowest quarterly results since the fourth quarter of 1995. Year-to-date, sales totaled $33.9 billion, down 22% from the same period in 2021, according to LIMRA.

“Rising interest rates helped the income annuity market but expectations of further rate increases by the Federal Reserve have likely damped the growth,” which effected the variable annuity market, the release states.

In addition, single premium immediate annuity sales were $2 billion in the second quarter, 25% higher than the prior year, according to LIMRA. Year-to-date, single premium immediate annuity sales were $3.5 billion, a 13% increase from 2021. In Q2, deferred income annuity sales fell 13% year-over-year to $443 million and year-to-date deferred income annuity sales were $808 million, also down 13%.

The preliminary Q2 2022 annuity industry estimates are based on monthly reporting that represents 85% of the total market, according to LIMRA.

Deals and People July 22, 2022

Retirement Industry People Moves

Lincoln Financial Group names workplace solutions head; T. Rowe Price adds two senior executives to its institutional DC business; new attorney joins The Wagner Law Group; and more.

Reported by

New Attorney Joins The Wagner Law Group

The Wagner Law Group has recently announced that attorney Beth Davis has joined the firm’s Los Angeles office as of counsel. 

Davis advises collectively bargained multiemployer funds. She also provides counsel to clients on retiree medical trust matters, including implementing health reimbursement arrangements and compliance with rules and regulations under the Internal Revenue Code. Her experience in employee benefits includes short-term and long-term disability claims, life waiver of premium claims and life insurance claims.

Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.

Before joining the firm, Davis spent 15 years representing individual claimants seeking benefits under ERISA plans. Davis has spoken on ERISA topics ranging from the intersection of ERISA with Social Security disability income benefits to how best to support a benefit claim at the initial and appeal levels.

Beth was previously a senior attorney at a Los Angeles law firm handling ERISA matters. She has been admitted to the bars of California, North Carolina and Illinois.

Lincoln Financial Group Names Workplace Solutions Head

Lincoln Financial Group has announced that James Reid will be joining the company in August as executive vice president, head of workplace solutions, to lead the organization’s group benefits and retirement plan services businesses. Reid will report to President and CEO Ellen Cooper and will be a member of the company’s senior management committee.

As the head of workplace solutions, Reid will be responsible for the strategy and executive leadership of core business lines for Lincoln, which offers a variety of products and services to employers and their employees. Continuing to align the employer-focused businesses under one leader will enable Lincoln’s workplace solutions team to collaborate and leverage best practices, according to firm leadership.

Reid comes to Lincoln from Versant Health, a subsidiary of MetLife, where he served as president and CEO. Prior to leading Versant, he held several senior leadership roles at MetLife for the past decade, most recently as executive vice president and head of global employee benefits. He has been in the industry for more than 30 years and has leadership experience in worksite-focused businesses.

Additionally, Ralph Ferraro will be stepping into an expanded role at Lincoln Financial as senior vice president and head of retirement plan services, reporting to Reid. This new role enables one leader to focus holistically, end-to-end, on the company’s retirement business.

Ferraro joined Lincoln Financial in 2016 as head of retirement product solutions, and in 2021, he took on a combined leadership role in the workplace solutions organization with additional leadership of the company’s group benefits product and underwriting functions. Ferraro has more than 25 years of industry experience; prior to Lincoln Financial, he held leadership positions at Voya Financial and CitiStreet.

T. Rowe Price Adds Two Senior Executives to Its Institutional DC Business


T. Rowe Pricehas announced that it has made two new hires to support its Americas institutional defined contribution investment only business.

Meenu Annamalai is a senior institutional client service executive. In this role, she will service DC plan sponsor clients located in the western and central U.S. and be responsible for engaging with consultants, advisers and DC organizations. She will primarily cover DCIO relationships, but also support defined benefit public and corporate clients, as well as endowments and foundations and high-net-worth clients. Based in San Francisco, Annamalai will report to Kim Young, head of institutional client service for T. Rowe Price’s Americas business.

Annamalai has more than 18 years of experience in the DC market and comes to T. Rowe Price from Mercer, where she was DC leader for the West market. Previously she served as a plan sponsor for HP Inc., where she was director of retirement investment and compliance. Annamalai holds a B.A. from York University and an MBA from University of California, Berkeley.

Jessica Sclafani is a senior defined contribution strategist. In her role, she will be responsible for driving Americas’ DC research and thought leadership agenda and contributing to overall DCIO strategy. Additionally, Sclafani will serve as a subject matter expert for the firm’s DC brand-building efforts more generally. She will be a resource to client service and business development professionals, as well as T. Rowe Price retirement professionals across the enterprise, to support firmwide DC initiatives. Sclafani will report to Michael Davis, head of defined contribution plan specialists for the Americas.

Sclafani has more than 14 years of experience, most recently with MFS Investment Management, where she served as a DC strategist for the investment solutions group. Prior to MFS, she led the retirement practice for industry consultant Cerulli Associates, where she guided the firm’s DC research efforts. Previously, she held an analyst position with Wellington Management. Sclafani holds a B.A. from Boston College and the Chartered Alternative Investment Analyst designation. She is based in Boston.

Alta Trust Company Names New General Counsel

After his over 30-year career as an ERISA attorney in private practice, Bruce Ashton has joined the Alta Trust Company team as general counsel. Prior to this position, Ashton provided legal services for Alta Trust for over a decade, which forged a strong professional relationship.

Ashton is an ERISA expert with an extensive background in retirement income and collective investment trusts, making him an ideal candidate to serve as Alta Trust’s general counsel.

 

«