U.S. insurers sold $10 billion in indexed annuities in the third quarter, more than any previous quarter in the industry’s history, according to an analysis released Friday. More than 10 percent of that record sales total was attributable to West Des Moines-based American Equity Investment Life Holding Co., which topped $1 billion in sales for the quarter as the third-largest seller of indexed annuities.
The record-setting sales figure, which includes sales by 42 carriers representing more than 98 percent of the U.S. indexed annuity market, was a 9.24 percent increase from the previous quarter’s record sales, according to the Wink’s Sales & Market Report.
“The big change that helped drive sales is that (interest) rates are much improved,” said Sheryl Moore, president and CEO of Wink Inc. the Pleasant Hill-based firm that compiles the report. She also credited greater consumer awareness of indexed annuities, noting that her firm typically receives several telephone inquiries daily from people around the country about the investment products.
Additionally, carriers have begun sweetening the bonuses offered to potential annuity holders, which prior to 2008 had been as high as 10 percent but have dropped to about 4 percent. Some insurers are also increasing the sales commissions they’re offering agents through the end of the year, Moore said.
“I anticipate because of the big increase in sales, we’re going to see other companies that are not in the indexed annuity market entering this space,” she said.
American Equity’s third-quarter sales of $1.012 billion, though down 7 percent from the second quarter, represented a 13 percent increase from the year-ago quarter. The company’s sales represent account for just over 10 percent of the U.S. indexed annuity market, behind Allianz Life’s 12.91 percent market share and Security Benefit Life’s 12.46 percent share of the market.
Aviva USA, now Athene USA, was the No. 5 seller of indexed annuities with nearly a 5 percent market share; Athene Annuity’s sales were reported separately as the 15thbiggest seller of indexed annuities, with $213.1 million in sales. Moore said she expects that Athene’s combined sales will be reflected in the fourth-quarter report.
Another carrier with Iowa operations, EquiTrust Life, a subsidiary of Guggenheim Partners, was the No. 6 seller of indexed annuities. Its $498.8 million in sales in the third quarter gave it nearly a 5 percent market share.
Fidelity Guaranty & Life, which earlier this month announced it is moving its headquarters from Baltimore to Des Moines, was the 14th-largest seller of indexed annuities. Third-quarter sales of $247.7 million gave it just under a 2.5 percent market share.