Life insurance annuity sales slowed in the second half of 2011, but rose 8 percent overall last year over 2010, reaching $240 billion, according to LIMRA's fourth quarter 2011 survey of individual annuity sales.
"While we saw significant growth in the first half of 2011, third- and fourth-quarter annuity sales fell quarter-over-quarter, tempering the double-digit growth seen at the mid-year mark," Joseph Montminy, LIMRA's assistant vice president of annuity research, said in a press statement.
Last year's total annuity sales were the highest since 2008, when sales reached $265 billion.
LIMRA's annual report tracked several trends in annuities:
- Variable annuity sales grew 13 percent overall in 2011 over 2010 to $159.3 billion, the second-highest level since 2007. But after six consecutive quarters of year-over-year growth, fourth-quarter variable annuity sales were flat year over year, and fell 4 percent compared to the previous quarter.
- Fixed annuity sales totaled $81 billion in 2011, slipping 1 percent from the previous year. With the Federal Reserve saying it will keep interest rates low through 2014, LIMRA researchers expect fixed annuity sales to remain flat in 2012.
- Indexed annuity sales were flat last year, totaling $32.2 billion.
- Sales of fixed immediate annuities reached a record-breaking $8.1 billion in 2011, up 7 percent from 2010. Growing interest from retirees is fueling the trend, according to LIMRA. Fixed immediate annuities provide a guaranteed income stream for a certain number of years or until the purchaser dies, depending on the policy.
"We anticipate demand for this product will grow for many years to come," Montminy said.
LIMRA is a global research and consulting organization that tracks the life insurance industry.