Second-quarter annuity sales jumped 9.9% to nearly $54.5 billion from $49.6 billion in the first quarter, according to data reported by Morningstar and Beacon Research.
Second-quarter annuity sales, however, were down 1.4% from the $55.3 billion reported in the second quarter of 2012.
Fixed annuity sales rose to their highest quarterly level since the fourth quarter of 2011, with sales totaling $17.14 billion, up 14.6% from just under $15 billion in the first quarter and up 0.2% from $17.1 billion in the second quarter of 2012, according to Beacon Research.
"Rising interest rates, along with the steepest yield curve in nearly two years, helped drive second quarter's fixed annuity sales growth," said Jeremy Alexander, president of Beacon Research, in a statement.
Meanwhile, variable annuity total sales topped $37.3 billion in the second quarter, according to Morningstar — a 7.8% increase from $34.6 billion in the first quarter, but a 2.2% drop from nearly $38.2 billion in the second quarter of 2012.
Indeed, Cathy Weatherford, president and CEO of the Insured Retirement Institute, said that "in previous quarters, demand for lifetime income was balancing headwinds from low interest rates." Now "with rates rising, we are seeing sales swing upwards with fixed sales reaching their highest mark in six quarters and variable annuity sales at their highest level in a year. With VA total net assets reaching a new record high and VA net sales showing marked improvement, overall it was a solid quarter for the industry."
