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IRI Issues First-Quarter 2016 Annuity Sales Report


IRIFixed Annuities Reach Highest Mark in Seven Years as Robust Fixed Indexed Annuity Sales Continue

WASHINGTON, D.C. (June 17, 2016) — The Insured Retirement Institute (IRI) today announced final first-quarter 2016 sales results for the U.S. annuity industry, based on data reported by Beacon Research and Morningstar, Inc. Industry-wide annuity sales in the first quarter of 2016 totaled $56.7 billion, a 7.6 percent increase from $52.7 billion during the first quarter of 2015, but a 4.1 percent decrease from $59.1 billion in the fourth quarter of 2015.

According to Beacon Research, fixed annuity sales during the first quarter of 2016 were at their highest
level in seven years. Sales of fixed annuities reached $30.7 billion, a 47.2 percent increase from sales of
$20.9 billion during the first quarter of 2015, and an increase of 8.8 percent compared to sales of $28.2
billion during the fourth quarter of 2015. Variable annuity total sales decreased to $26 billion in the first
quarter of 2016, according to Morningstar. This was an 18.5 percent decline from $31.8 billion in the first
quarter of 2015 and a 16 percent decline from $30.9 billion in the prior quarter.

“We are seeing the dynamics of an ever-changing market, where a full suite of strategies are now being
employed to provide guaranteed lifetime income,” IRI President and CEO Cathy Weatherford said.
“Retirement planning is now more than ever multidimensional. As a result, we are seeing a broadened
product shelf being used in a holistic way to solve for a wide array of individual needs. An ever growing
suite of retirement income products – including income annuities, fixed-rate annuities, and both fixed
indexed and variable annuities with guaranteed living benefits – are available to advisors to help their
clients address the various risks they face in retirement, including longevity risk, sequence of returns risk,
inflation risk, and liquidity risk.”

According to Beacon Research, strong quarterly sales were once again largely supported by robust sales
of fixed indexed annuities. Fixed indexed annuity sales reached their second highest quarterly sales mark
on record, totaling $15.6 billion in the first quarter of 2016. This represents a 34.9 percent increase from
sales of $11.6 billion in the first quarter of 2015, but a 2.8 percent decrease from record sales of $16.1
billion in the prior quarter. Sales of market value adjusted (MVA) annuities – a type of fixed-rate annuity
– soared during the first quarter. Sales of MVA annuities reached $5.3 billion during the first quarter of
2015, a 163.9 percent increase from sales of $2 billion in the first quarter of 2015 and a 66.5 percent
increase from sales of $3.2 billion in the previous quarter. For the entire fixed annuity market, there were
approximately $17.5 billion in qualified sales and $13.2 billion in non-qualified sales during the first
quarter of 2016.

“Fixed annuity sales have increased for the fourth straight quarter,” said Beacon CEO Jeremy
“On a year-over-year basis, sales are up 47.2 percent or $9.8 billion, and 71 percent of that
increase occurred in the bank and broker dealer channels, which have been the primary drivers of fixed
annuity growth since early 2011. This is a trend we expect to continue as more customers of financial
institutions move closer to and into retirement, and seek products that offer competitive yield and
comparative safety.”


According to Morningstar, variable annuity net assets increased slightly in the first quarter of 2016,
reaching $1.87 trillion. This represents a 0.2 percent increase from the end of the fourth quarter of 2015.
Within the variable annuity market, there were $18.3 billion in qualified sales and $7.7 billion in nonqualified
sales during the first quarter of 2016.

“It appears that a rough start for the markets in 2016 had a significant impact on first quarter sales,” said
Kevin Loffredi, Senior Product Manager at Morningstar. “In particular, we saw a 28 percent drop in sales from December to January. However, in February and March, we saw healthy gains in month-over month sales of 15.4 percent and 5.2 percent, respectively, as markets stabilized and then recovered.”


*Total Premium Sales, also called Total Premium Flows, represents the sum of new sales [all first-time buyers of a contract, including interand intra-company exchanges] and additional premiums from existing contract owners. Net Sales, also called Net Flows, represents Total Premium Sales minus surrenders, withdrawals, inter- and intra-company exchanges, and benefit payments.

**Morningstar estimates net sales based on a calculation methodology used across all investment universes for which Morningstar collects and publishes asset and performance data, including global open end mutual funds, separate accounts, and exchange traded funds.


About Morningstar, Inc.:

About Morningstar, Inc.: Morningstar, Inc. is a leading provider of independent investment research in
North America, Europe, Australia, and Asia. The company offers an extensive line of products and services
for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
1100 Vermont Avenue, NW, 1oth Floor · Washington, D.C. 20005 · 202-469-3000 · Fax: 202-469-3030
Morningstar provides data on more than 510,000 investment offerings, including stocks, mutual funds, and
similar vehicles, along with real-time global market data on more than 17 million equities, indexes, futures,
options, commodities, and precious metals, in addition to foreign exchange and Treasury markets.
Morningstar also offers investment management services through its investment advisory subsidiaries, with
more than $180 billion in assets under advisement and management as of Dec. 31, 2015. The company has
operations in 27 countries.

About Beacon Research:

Beacon Research is an independent research company and application service provider founded in 1997 and based in Northfield, Ill. Beacon tracks fixed and variable annuity features, rates and sales. Its quarterly Fixed Annuity Premium Study is the first and only source to analyze fixed annuity sales at the product level, and the first to make a decade’s worth of sales information available to subscribers online at Beacon lowers compliance risk and increases fixed annuity sales with 100% carrier-approved, comprehensive product profiles, spreadsheets and search tools for the advisor/rep websites of banks, TPMs, broker-dealers and marketing organizations. Carriers and financial institutions use its systems at for compliance review of 1035 exchanges, sales support, conservation and product research. Beacon also licenses information to other platforms. Directly and through licensees, Beacon information can be accessed by hundreds of financial institutions
and thousands of advisors.

About the Insured Retirement Institute:

The Insured Retirement Institute (IRI) is the leading association for the retirement income industry. IRI proudly leads a national consumer coalition of 40 organizations, and is the only association that represents the entire supply chain of insured retirement strategies. IRI members are the major insurers, asset managers, broker-dealers/distributors, and 150,000 financial professionals. As a not-for-profit organization, IRI provides an objective forum for communication and education, and advocates for the sustainable retirement solutions Americans need to help achieve a secure and dignified retirement. Learn more at

1100 Vermont Avenue, NW, 1oth Floor · Washington, D.C. 20005 · 202-469-3000 · Fax: 202-469-3030

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