2Q Index Annuity Sales Hit Another Record: $3.7 Billion

The top seller in the second quarter, as in the previous four quarters, was Allianz Life, with 33.75% of market share on index annuity volume of over $1.2 billion.

The other leading sellers in the second quarter of 2003 were, in declining order, AmerUS Group, at over $366 million in premium; American Equity, at nearly $267 million; Fidelity & Guaranty, at over $171 million; and Midland National Life, at nearly $170 million.

Production at the top three companies, combined, represent a market share of nearly 51%, the report indicates. For the top five companies, the market share came to slightly over 68%.

The highest street-level commissions paid by index annuities fell in the second quarter of 2003, compared to the same period a year ago. For example, in the 2003 second quarter, only 3% of index annuities paid agents commissions of 11% and up. In the same year earlier period, 35% of index annuities paid commissions of 11% and higher.

The commission category showing the greatest increase in the second quarter of 2003 was the category of index annuities paying agent commissions of 7% to 8%. Specifically, 36% of second quarter 2003 index annuity sales were in products paying 7%-8% commissions. By comparison, just 11% of such sales in the same year earlier period generated 7%-8% commissions.

The average index annuity commission in the second quarter of 2003 came to 8.12%, the report says.

Bonus index annuities–which pay extra interest, typically in the first policy year–represented 58.41% of overall sales in the second quarter of 2003, notes the report.

The Advantage Group says 95% of index annuities link their interest crediting calculations to changes in the S&P 500 index. But 11 carriers offer other bond or equity indices, too, it says.

Reproduced from National Underwriter Life & Health/Financial Services Edition, September 1, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.