FACTS AND STATISTICS - Insurance Information Institute (III)  
Annuities
SALES OF FIXED AND VARIABLE ANNUITIES

There are several types of annuities. Deferred annuities generally accumulate assets over a long period of time, with withdrawals usually as a single sum or as an income payment beginning at retirement. Immediate annuities allow purchasers to convert a lump sum payment into a stream of income that begins right away.

Deferred and immediate annuities can be either fixed or variable. Generally, interest credited and payments made from a fixed annuity are based on rates declared by the company, which can change only yearly. Fixed annuities are considered “general account” assets. In contrast, variable annuity account values and payments are based on the performance of a separate investment portfolio, thus their value may fluctuate daily. Variable annuities are considered “separate account” assets.

There are a variety of fixed annuities. One example, the equity-indexed annuity, is a hybrid of the features of fixed and variable annuities. It credits a minimum rate of interest, just as other fixed annuities do, but its value is also based on the performance of a specified stock index—usually computed as a fraction of that index’s total return. Annuities can also be classified by marketing channel, in other words whether it is sold to groups or individuals. (See the Premiums by Line table, page____.)
INDIVIDUAL ANNUITY CONSIDERATIONS, 2003-2007 (1)

($ billions)


 

 

 

Total

Year

Variable

Fixed

Amount

Percent change from prior year
2003$129.4$89.4$218.8-0.5%
2004132.987.9220.80.9
2005137.678.9216.5-1.9
2006184.272.8257.018.7
2007160.478.3238.7-7.1
(1) Based on LIMRA's estimates of the total annuity sales market. Includes some considerations (i.e., premiums) that though bought in group settings involve individual buying decisions.

Source: LIMRA International.
  • Variable annuity sales decreased 12.9 percent in 2007 after increasing 33.9 percent in 2006.

  • Fixed annuity sales increased 7.6 percent in 2007, compared with a decrease of 7.7 percent in 2006.

ANNUITY DISTRIBUTION SYSTEMS

Insurance agents, including career agents, who sell the products of a single life insurance company, and independent agents, who represent several insurers, account for almost 40 percent of annuity sales. State and federal regulators require sellers of variable annuities, which are similar to stock market-based investments, to register with NASD and the Securities and Exchange Commission.
SALES OF INDIVIDUAL ANNUITIES BY DISTRIBUTION CHANNELS,
2003 AND 2007 (1)




(1) Preliminary.

Source: LIMRA International.


VARIABLE ANNUITY TOTAL SALES BY DISTRIBUTION CHANNEL, 2007 (1)



(1) As of December 31, 2007.
(2) Regulated by the Financial Industry Regulatory Authority.

Source: Morningstar, Inc.


NET ASSETS OF VARIABLE ANNUITIES, 1998-2007

($ billions)



Source: Morningstar, Inc.

TOP TEN WRITERS OF VARIABLE ANNUITY CONTRACTS BY NEW SALES, 2007

($ millions, end of year)


Rank

Company

New sales
1Teachers Insurance & Annuity Association$13,925
2RiverSource Life Insurance Company5,593
3Jackson National Life Insurance Company5,136
4John Hancock Life lnsurance Company (USA), Venture III5,067
5Variable Annuity Life Insurance Company4,895
6Pacific Life Insurance Company4,266
7American Skandia Life Assurance Company3,514
8Metropolitian Life Insurance3,269
9Hartford Life Insurance Company 3,241
10John Hancock Life lnsurance Company (USA), Venture 20063,165
Source: VARDS/Morningstar.
TOP TEN PRODUCERS OF EQUITY INDEX ANNUITIES BY TOTAL SALES, 2007

($ millions)


Rank

Company

Total sales

Market share
10Conseco/Bankers Life783.93.11
9EquiTrust878.53.49
8Jackson National Life893.53.55
7Great American Financial1,007.14.00
6ING1,312.65.21
5Midland National Life1,655.96.57
4Old Mutual1,960.07.78
3American Equity2,093.68.31
2Aviva4,346.417.25
1Allianz$5,423.721.53%
Source: AnnuitySpecs.com Advantage Index Sales & Market Report.
TOP TEN WRITERS OF FIXED ANNUITIES SOLD THROUGH BANKS, 2006-2007

($ millions)


Rank

Company

2006

2007
1AIG Annuity  $5,138 $5,213
2New York Life  2,5182,156
3Allstate Financial  3,2661,747
4Principal Financial Group  8571,583
5AEGON/Transamerica  1,1321,350
6Genworth Financial  1,165717
7Jackson National Life  798571
8Western-Southern Financial 615541
9Symetra Financial390523
10Hartford Life349486
Source: Kehrer-LIMRA.
TOP TEN WRITERS OF VARIABLE ANNUITIES SOLD THROUGH BANKS, 2006-2007

($ millions)


 

 

Premiums  

Rank

Company

2006

2007
1Hartford Life  $4,801$5,080
2Pacific Life  3,3343,761
3AXA  2,0142,563
4Nationwide Financial  1,6111,876
5John Hancock  1,2791,712
6ING  9881,617
7RiverSource Life Insurance1,1431,182
8Jackson National Life  6761,066
9AIG/SunAmerica  1,003985
10Lincoln Financial  654955
Source: Kehrer-LIMRA.