AnnuitySpecs.com Releases First Quarter, 2009 Indexed Sales

May 2009

Fifty indexed annuity carriers participated in the 47th edition of the Advantage Index Sales & Market Report, representing 99% of indexed annuity production. Total first quarter sales were $7.0 billion, up 22.8% from the same period last year. As compared to the previous quarter, sales were down 2.1%. “Never has there been a better opportunity to manufacture or sell indexed annuities,” said Sheryl J. Moore, President and CEO of AnnuitySpecs.com. “The demand for indexed annuities has never been greater because of American’s flight to quality from the equities markets. Unfortunately, the supply of annuities cannot keep up with the demand right now, because annuities are so capital intensive. This is the first time I have ever seen a mismatch between the supply and demand of these products- it’s a dilemma.” Moore projects record-setting sales in 2009, despite these challenges.

It is worth mentioning that Aviva still holds the #1 position in the market. Lincoln National took a surprisingly aggressive hold of the #4 rank from their previous rank at #10 and Jackson National Life moved-up three slots to #6 in the market.

American Investors Income Select Bonus is the #1 selling indexed annuity in the market for the third consecutive quarter. Interestingly, thirteen companies have exited the indexed annuity market since the 4th quarter of 2008. Nearly 57% of all indexed annuity sales continue to come through Iowa-domiciled companies.

For indexed life sales, 27 carriers in the market participated in the Advantage Index Sales & Market Report, representing 99% of production. First quarter sales were $105.5 million, a decline of more than 33% from the previous quarter and 14% from the same period in 2008. “Several companies were forced to exit the indexed life market abruptly due to pricing issues with 2001 CSO,” Moore declared. “I anticipate indexed life sales will rebound, as these carriers re-enter the market and agents become acclimated with the new 2001 CSO ULs. In addition, I am expecting some big companies to enter the market shortly, which will generate much more interest in these products.”

Noteworthy items of interest in the indexed life market this quarter include Aviva’s firm hold on their #1 position, with a 25% market share. Penn Mutual rose from the #12 slot to be ranked #5 for the quarter and National Western rose six slots to a #8 ranking. Pacific Life’s Indexed Accumulator III also held on to its rank as the #1 indexed life product for the quarter. Nearly 80% of sales utilized an annual point-to-point crediting method, and more than 50% of sales were placed into 9-10 year contracts.

For more information go to www.annuityspecs.com or www.lifespecs.com.

Advantage Group Associates, Inc. and AnnuitySpecs.com has a decade of experience working with indexed products. They provide services in speaking, research, training, product development, and marketing of indexed products. Their knowledge in product filing research and policy forms analysis gives them the expertise to provide competitive intelligence that allows carriers to stay ahead of their competitors.

Sheryl J. Moore is president of Advantage Group Associates, Inc., and the guiding force behind the industry’s most comprehensive index annuity due diligence tool, AnnuitySpecs.com as well its sister site, 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. She is the author of the quarterly Advantage Index Sales & Market Report.