Fourth quarter fixed annuity sales declined 11% from the previous quarter to $19.6 billion in the fourth quarter, according to Beacon Research’s Fixed Annuity Premium Study. 

Book value fixed annuities made up the bulk of sales at $9 billion, followed by indexed annuities at $6.9 billion, market-value adjusted annuities at $1.8 billion and fixed income annuities at $2 billion.

Overall fixed annuity sales were down 40% compared to a year earlier, but Beacon said that fourth quarter 2008 sales were at “near-record levels.”

Jeremy Alexander, Beacon's chief executive officer, said that he expects a “sequential increase” in fixed annuity sales when first quarter results are released. However, he said, “Though consumer demand should remain strong, further growth will depend on the interest rate environment and the availability of investment grade bonds to back new business.”

Western National Life, New York Life and Allianz Life were the top three fixed-annuity providers in terms of sales in the fourth quarter.