Individual Annuity Sales Reach $215B in First Half of 2024

U.S. individual annuity sales set a new record in the first half of 2024, according to new data from LIMRA. Total sales hit $215.2 billion in the first half of the year, a 19% jump from prior-year results and a new sales record for the first six months of a year since LIMRA started tracking sales in the 1980s. 

In the second quarter alone, total annuity sales increased 25% year-over-year to $108.5 billion. According to LIMRA, this is the second largest quarterly total ever recorded, just shy of the record set in the fourth quarter of 2023.  

“Annuities have benefited from the favorable economic conditions and the Federal Reserve not cutting interest rates this year,” said Bryan Hodgens, LIMRA’s senior vice president and head of research, in a statement. “We also believe demographic trends and a growing awareness of [the] unique value proposition annuities offer have shifted the U.S. annuity market post pandemic, resulting in 15 consecutive quarters of strong sales growth.” 

The Fed has indicated it will start cutting interest rates at its mid-September meeting, given inflation’s improved trajectory and a labor market in better balance. 

Within the broad range of annuities, fixed-indexed annuities had another record quarter, with sales totaling $29.7 billion, 17% higher than the prior year.  

“Investor interest in products that offer downside protection with upside growth potential remains high,” Hodgens said. “To put these results into perspective, just two years ago, FIA sales [for the year] were $10 billion lower than the second quarter 2024 results.”  

Even with the prospect of possible rate hikes later this year, Hodgens said LIMRA expects FIA product sales to remain strong through 2024, possibly eclipsing the record set in 2023. 

Registered index-linked annuities, which combine some features of fixed-index annuities while also offering some downside protection, also saw record quarterly sales. In the second quarter of this year, RILA sales were $16.2 billion, 42% higher than Q2 2023. In the first half of 2024, RILA sales jumped 41% to $30.7 billion.  

Hodgens said many insurance carriers have launched or enhanced their RILA products in the first half of the year, and these product innovations are driving a “more competitive landscape,” signaling the RILA market has significant growth potential. 

In addition, total fixed-rate deferred-annuity sales were $40 billion in the second quarter, 32% higher than the second quarter of 2023 but down 7% from the first quarter of 2024. 

In response to the S&P 500 growing nearly 10% in the second quarter, traditional variable annuity sales improved as well, climbing 18% to $15.6 billion. Because variable annuities are comprised of a portfolio of underlying investments, these annuities are impacted by the stock market. Therefore, if the stock market performs well, variable annuities will become more attractive. 

Despite the Treasury 10-year interest rate average being above 4.4% in the second quarter, LIMRA found that single premium immediate annuity sales fell 9% year over year to $3.1 billion in the second quarter. Meanwhile, deferred income annuity sales soared 62% to $1.7 billion in Q2. 

LIMRA’s U.S. Individual Annuity Sales Survey represents 92% of the total U.S. annuity market. LIMRA will release the top-20 rankings of total, variable and fixed annuity providers for the first half of 2024 in mid-August.