Variable Up, Fixed Down In 2003 Annuity Sales

VA premium placed directly into separate accounts rose in all four quarters of 2003, while VA premium placed directly into fixed accounts declined each quarter, LIMRA found. Variable immediate annuity sales declined 15% from $607 million in 2002 to $518 million in 2003.

Fixed deferred annuity sales declined each quarter, except for equity indexed annuities, whose sales increased over the year before. Fixed immediate annuity sales totaled $5 billion for the year and structured settlement premium reached $6 billion, both up slightly.

Agents, both career and independent, accounted about equally for around $82 billion in annuity sales, followed by banks at $50 billion. Stockbrokers sold some $32 billion worth, while financial planners and independent broker-dealers sold nearly $20 billion. Direct response and other channels accounted for the remainder.

The shift from fixed to variable products showed clearly in bank sales, LIMRA notes. Although banks led all other channels in fixed sales, their totals fell from $36.9 billion in 2002 to $32.9 billion in 2003. Meanwhile, banks' VA sales rose 54%. from $11.2 billion to $17.1 billion. Banks increased their share of total annuity sales by 4%.