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U.S. Annuity Insurance Sales Surge in 2024: Q3 Growth Trends

    Total annuity insurance sales in the U.S. reached $114.6 bn in the third quarter of 2024, marking a 29% year-over-year increase. This represents the 16th straight quarter of growth, just below the record set in Q4 2023, based on data from LIMRA‘s U.S. Individual Annuity Sales Survey.

    Strong economic conditions and demand for guaranteed retirement income continue to drive robust annuity sales.

    Even with the potential for further rate cuts, LIMRA expects fixed annuity products to surpass previous sales, setting new records in 2024. In the first three quarters of 2024, total annuity sales rose 23%, totaling $331.2 bn.

    Fixed-Rate Deferred Annuity Sales

    Fixed-rate deferred (FRD) annuity sales hit $40.7 bn in Q3, up 18% from the previous year. Year-to-date, FRD sales totaled $124.4 bn, a 17% increase (see TOP 100 Life & Health Insurance Companies in the U.S. in 2024).

    FRD sales remained robust, likely driven by market volatility in July and August and an anticipated rate cut in September.

    Additional rate cuts could moderate FRD growth; however, many FRD contracts are set to exit surrender this year, and LIMRA anticipates a portion of these assets to reinvest in FRD products, leading to another solid year.

    Registered Index-Linked Annuity Sales

    Fixed-Rate Deferred Annuity Sales

    Registered index-linked annuity (RILA) sales reached $17.3 bn in Q3 2024, a 37% increase year-over-year and the sixth consecutive record quarter. YTD, RILA sales rose 40% to $48.2 bn.

    “Since early 2024, numerous carriers have launched new RILA products or improved existing ones to meet high investor demand,” Hodgens stated. “LIMRA forecasts another record-breaking year for RILA sales in 2024, with continued growth into 2025.”

    Fixed Indexed Annuity Sales

    Fixed indexed annuity (FIA) sales hit a new high, reaching $34.9 bn in Q3, up 54% year-over-year. For context, FIA sales were $17.1 bn three years ago, half the current level. YTD, FIA sales rose 33%, totaling $94.2 bn.

    “Consumer interest in products offering downside protection and growth potential has surged amid economic uncertainty, making FIAs increasingly appealing,” Hodgens noted. “LIMRA anticipates FIA sales will exceed 2023’s record and remain strong through 2025.”

    Income Annuity Sales

    Income annuity sales saw minimal impact from the September rate cut, with single premium immediate annuity (SPIA) sales reaching $3.4 bn in Q3, up 17% year-over-year.

    YTD, SPIA sales rose 7% to $10.4 bn. Deferred income annuity (DIA) sales totaled $1.3 bn, up 40% from Q3 2023, and YTD DIA sales increased 33%, reaching $3.8 bn.

    Traditional Variable Annuity Sales

    Traditional Variable Annuity Sales

    Traditional variable annuity (VA) sales continued to grow in Q3, totaling $14.9 bn, up 14% from the previous year. YTD, traditional VA sales reached $44 bn, reflecting a 12% annual increase.

    These preliminary Q3 2024 annuity industry estimates are based on 83% market coverage through monthly reporting. LIMRA will release the top 20 rankings for total, variable, and fixed annuity carriers by mid-November, after carrier earnings calls.

    LIMRA, with over a century of expertise, provides around 500 reports annually across 80 benchmark studies, offering valuable insights into market behaviors and trends.

    FAQ

    What were the total annuity sales for 2024?

    Total annuity sales reached $114.6 bn in the third quarter of 2024, marking a 29% increase year-over-year and continuing 16 quarters of consistent growth.

    How did fixed-rate deferred (FRD) annuities perform in 2024?

    FRD annuity sales reached $40.7 bn, an 18% rise compared to Q3 2023. Year-to-date, FRD sales totaled $124.4 bn, up 17%.

    What was the performance of registered index-linked annuities (RILA) in 2024?

    RILA sales set a record for the sixth consecutive quarter, totaling $17.3 bn, a 37% increase year-over-year. Year-to-date, RILA sales were up 40%, totaling $48.2 bn.

    How did fixed indexed annuity (FIA) sales fare in 2024?

    FIA sales reached a record $34.9 bn in Q3 2024, a 54% increase from the prior year. Year-to-date, FIA sales grew 33% to reach $94.2 bn.

    What impact did recent interest rate cuts have on income annuity sales?

    The interest rate cut in September had little immediate effect on income annuity sales, but expectations of rate cuts likely boosted sales in Q2 and Q3. SPIA sales were up 17% year-over-year, while DIA sales rose 40%.

    How did traditional variable annuity (VA) sales perform in 2024?

    Traditional VA sales grew by 14% year-over-year, reaching $14.9 bn. Year-to-date, VA sales totaled $44 bn, reflecting a 12% increase.

    When will LIMRA release the top annuity carrier rankings for 2024?

    LIMRA plans to release the top 20 rankings for total, variable, and fixed annuity carriers in mid-November after carriers’ earnings calls are completed.

    ………….

    AUTHOR: Bryan Hodgens – LIMRA’s senior vice president and head of research

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