U.S. annuity sales reached $105.4 bn in Q1 2025, coming within 1% of the record set in Q1 2024, according to preliminary data from LIMRA’s U.S. Individual Annuity Sales Survey.
This marks the sixth straight quarter in which total annuity sales have exceeded $100 bn. Sales of fixed-rate deferred annuities totaled $39.5 bn, down 8% from the same period in 2024.
Despite the year-over-year decline, these products accounted for nearly 38% of the overall market and continue to contribute significantly to industry growth. Sales rose 35% compared to the fourth quarter, primarily due to strong performance in March.
According to Bryan Hodgens, senior vice president and head of LIMRA research, the average crediting rate for a three-year FRD product remains about 200 basis points above the average CD rate.
He noted that these annuities remain appealing to conservative investors seeking to limit exposure to market volatility.
This growing economic anxiety drove March sales results to be the second-highest in history. LIMRA expects the current environment will likely attract more investors to registered indexed-linked and fixed-indexed annuities, which offer greater protected growth opportunity.
Bryan Hodgens, senior vice president and head of LIMRA research
Registered index-linked annuities posted $17.5 bn in sales in the first quarter, a 21% increase from the same period last year.
LIMRA expects demand for these products to remain strong, as they allow investors to manage downside risk while giving insurers flexibility in risk management. Hodgens said LIMRA anticipates 2025 RILA sales to match or exceed the record set in 2024.
Traditional variable annuity sales rose 14% in the first quarter to $15.6 bn.
According to LIMRA, increased concern over the economy has influenced recent purchasing decisions.
Hodgens said economic anxiety has intensified since January, which pushed March results to the second-highest monthly level in history.
Although first quarter FRD sales were lower year-over-year, sales rebounded 35% from fourth-quarter results, driven largely by March sales results.
Bryan Hodgens
He added that the current economic climate will likely continue to attract interest in products like RILAs and fixed-indexed annuities, which provide options for growth with protection.
“The average crediting rate for a three-year FRD product remains nearly 200 basis points above the average CD rate. For conservative investors who wish to avoid market volatility risk, these products continue to be an attractive option,” said Hodgens.
