Retail annuity sales exceeded $100 bn in each quarter of 2024 for the first time, rising 12% to a record $433 bn, according to LIMRA.
U.S. individual life insurance premium is on track to reach a record $16 bn in 2024 and continue growing in the current year, as the market continues riding a bounce first seen during the COVID-19 pandemic.
LIMRA’s U.S. Individual Annuity Sales Survey confirmed 2024 as the third consecutive year of record annuity sales, totaling $1.1 tn over three years. The final results aligned with preliminary data the group had reported.
In the fourth quarter, U.S. annuity sales declined 13% to $100.6 bn. Falling interest rates reduced demand for fixed-rate deferred annuities and income annuities, lowering total sales, LIMRA said.
Bryan Hodgens, LIMRA’s senior vice president and head of research, described 2024 as a strong year, with 80% of carriers reporting growth (see TOP 100 Life & Health Insurance Companies in the U.S.).
“Favorable economic conditions and increasing investor awareness of annuities’ protections and guarantees supported broad growth,” Hodgens said.
The past few years reshaped the annuity market. While sales may not match the past two years, LIMRA expects total annuity sales to exceed $350 bn in 2025 and remain above $300 bn through 2027.
Bryan Hodgens, LIMRA’s senior vice president and head of research
Registered index-linked annuity (RILA) sales rose 35% to $17.5 bn in the fourth quarter. For the full year, sales climbed 38% to $65.4 bn, marking a 10th consecutive record year and surpassing traditional variable annuity sales for the first time.
“Increased competition and ongoing product innovation have significantly expanded RILA sales over the past decade—from $3.7 bn in 2015 to $65.4 bn in 2024,” Hodgens said. “With market uncertainty persisting, RILA products now occupy a clear position between traditional variable annuities and fixed index annuities. LIMRA expects sales to remain at or slightly above 2024 levels.”
Traditional variable annuities increased for the first time in three years, with total 2024 sales rising 18% to $60.8 bn. Fourth-quarter sales surged 35% to $16.6 bn.
Fixed indexed annuity (FIA) sales reached $31.8 bn, up 28% from a year earlier and marking a third consecutive quarterly high, though 10% below the record from the previous quarter.
For 2024, FIA sales grew 32% to $126.8 bn, and three-quarters of LIMRA’s top 20 carriers reported at least double-digit growth.
LIMRA expects lower interest rates to soften FIA demand in 2025, though sales should remain above $100 bn.
Fixed-rate deferred annuities (FRD) saw a fourth straight quarterly decline, dropping 52% year-over-year to $28.3 bn. Full-year FRD sales fell 8% to $152.3 bn.
The fourth quarter had the lowest FRD sales in 10 quarters. Despite expected interest rate cuts, LIMRA anticipates FRD annuity sales to stay above $120 bn in 2025—still twice the level recorded before 2022.
Strong fourth-quarter performance pushed new annualized life insurance premiums up 4% to $16.2 bn in 2024, marking a fourth consecutive record year, LIMRA previously reported.
Fourth-quarter life insurance premiums rose 14% to $4.6 bn, while policy sales increased 2% from the same period in 2023, according to LIMRA. Policy counts for 2024 remained steady compared to 2023.
