Sales of indexed-annuities up in third quarter
Sales of equity-indexed annuities (EIAs) are poised for another record-breaking year, with sales in the third quarter of 2001 up 31 percent compared to 2000.
|The greatest sales growth in EIAs came from products that offer consumers a bonus on the initial premium.|
Equity-indexed annuities offer a guaranteed interest rate as well as the potential for higher returns based on the performance of stock or bond indexes such as Standard & Poor's 500, the Dow Jones Industrial Average, or Nasdaq, providing a middle ground between fixed and variable annuities.
Sales of the hybrid product were $1.59 billion in the third quarter, bringing total sales for the first nine months of 2001 to $4.45 billion, according to figures released by the Advantage Group of St. Louis, a research and consulting organization specializing in indexed annuities.
That means that EIA sales need only hit the $1 billion mark, or fall by 37 percent, to produce the sixth consecutive year of record-breaking sales, says Jack Marrion, president and founder of the Advantage Group.
Although third-quarter sales were up compared to 2000, they slipped by ¾ percent from the second quarter's record-setting level of $1.6 billion. The average third-quarter premium jumped 10 percent to more than $33,000 compared to second-quarter sales.
Midland National Life Insurance Co. eked past Allianz to become the largest provider of EIAs by sales in the third quarter, ending a year and a half at the top of the market by the German insurance group, says Marrion.
The top five sellers of equity-indexed annuities are:
- Midland National
- American Equity Investment Life Insurance Co.
- AmerUS Group
- Jackson National Life Insurance Co.
The greatest sales growth in EIAs came from products that offer consumers a bonus on the initial premium, and more new products include these bonuses.