Sales of deferred income annuities topped $1 billion in 2012, according to a report from industry group LIMRA. In the fourth quarter specifically, sales for deferred income annuities reached $390 million, nearly 150% higher than the first quarter, LIMRA said. However, they are still a minor portion of the overall market, representing less than one percent of total annuity sales.
“As an emerging market, DIAs have experienced significant growth in 2012,” said Joe Montminy, assistant vice president and director of LIMRA annuity research, in a press release.
He said that as consumers in the 45 to 59 age bracket continue to look for sources of income, these products will continue to have “remarkable growth.”
Total annuity sales were $52.6 billion in the fourth quarter, a decline of 8% from the previous year. Variable annuity also decreased 8% to reach $35.0 billion.
“Unlike historical trends, VA sales did not follow equity market growth, which increased 13% in 2012,” noted Montminy. “VA sales performance in 2012 was clearly influenced by companies’ strategic management of their books of business—removing some products from the market, limiting additional contributions into existing contracts, and revising features/pricing on GLB riders.”
Total fixed annuity sales were $17.6 billion in the fourth quarter, falling 7% from the fourth quarter of 2011.