Indexed Annuity Sales Set A Record For 2Q 2009

Forty-seven indexed annuity carriers participated in the 48th edition of the Advantage Index Sales & Market Report, representing 99% of indexed annuity production. Total second quarter sales
were $8.3 billion, up 21.2% from the same period last year. As compared to the previous quarter, sales were up 18.3%. “This is a record quarter for indexed annuity sales!,” said Sheryl J. Moore, President and CEO of AnnuitySpecs.com. “Never has there been a more challenging period for those selling indexed annuities. Scarce capital has resulted in most carriers making changes to their annuities including commission reductions, premium bonus reductions, increasing minimum premiums, and dropping issue ages. We’ve even seen folks terminating distribution and halting new agent appointments. Despite these challenges, Americans have spoken, and indexed annuities are the product of choice!” Moore projects record-setting sales for the remainder of 2009, despite the challenging market.

It is worth mentioning that Aviva still holds the #1 position, with a 20% share in the market. Allianz Life’s MasterDex X is the #1 selling indexed annuity (IA) in the market. One year ago there were 59 companies offering a total of 333 different indexed annuities. Today, there are only 45 companies, offering a mere 266 IAs. Interestingly, fifty percent of all indexed annuity sales continue to come through Iowa-domiciled companies.

For indexed life sales, 32 carriers in the market participated in the Advantage Index Sales & Market Report, representing 100% of production. Second quarter sales were $132.4 million, an increase of nearly 26% from the previous quarter and 3% from the same period in 2008. “The indexed life market is finally improving, since the disruption due to the 2001 CSO transition,” Moore declared. “And because of the decline of the equities markets, and the guarantees that Americans are seeking, we’re going to see more companies entering the indexed UL market. No other product is as strategically positioned to provide downside protection and upside potential during a volatile markets. I predict record sales this year!”

Items of interest in the indexed life market this quarter include Aviva’s firm hold on their #1 position, with a 21% market share. 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 nearly 47% 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. AnnuitySpecs.com, and LifeSpecs.com have 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 indexed life and index 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. She is the author of the quarterly Advantage Index Sales & Market Report.

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