>First-quarter total sales of variable annuities in the United States rose to $31.4 billion, a 3% increase from the same period in 2009, according to Morningstar Inc. and the Insured Retirement Institute.
The last time sales posted a year-over-year increase was in the first quarter of 2008 — when sales came in at $41.6 billion, posting a 1.7% gain from the previous year, said Danielle Holland, a spokeswoman for IRI. The milestone in the first quarter of 2010 signifies “a cautious return” of investors to the stock market, she said.
Morningstar’s data includes sales from individual, as well as registered group annuities.
LIMRA put total sales of these stock market-linked retirement savings and income products a bit higher — at $32.4 billion. But sales in last year’s first quarter were at their lowest levels since third quarter 2004, it said.
Eight out of 10 investors who bought a variable annuity protected themselves with a “living-benefit” guarantee, the most popular of which was the guaranteed lifetime withdrawal benefit, Holland said.
Prudential Financial Inc. in 2009 became the No. 1 seller of variable annuities in the United States, with sales of $16.1 billion last year, according to Morningstar (BestWire, March 16, 2010). It had never been No. 1 in the annual company ranking, and it took first place in the quarterly ranking for the first time in the third quarter of 2009 and maintained first place in the fourth quarter, according to Frank O’Connor, product manager, VA database, for Morningstar.
Prudential Financial, with year-to-date sales of $4.86 billion, remained the No. 1 seller in the first quarter.
Capturing second place was MetLife (NYSE: MET), with year-to-date sales of $4.03 billion, according to Morningstar. TIAA-CREF ranked third, with sales of $3.44 billion, while Jackson National Life came in at No. 4, with sales of $3.13 billion.
Rounding out the top five was Lincoln National Corp. (NYSE: LNC), with year-to-date sales of $2.03 billion, according to Morningstar. There also were no changes in rank from the fourth quarter among the top five companies.
Overall, companies are making their products simpler for consumers and less risky for themselves, Holland said. They’re reducing “the clutter and confusion” to focus on the real value of an annuity to an entire retirement portfolio, she said.
During the first quarter, carriers filed with regulators more than 140 changes to their products — including changes to living benefit guarantees, Holland said.
(By Fran Matso Lysiak, senior associate editor, BestWeek: fran.lysiak@ambest.com)
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