Variable annuity sales rose in 2010 on "continued innovation in product development" by annuity carriers, according to a report compiled by Morningstar and released Wednesday by the Insured Retirement Institute.
"We expect the pendulum to continue the swing back toward more generous benefits during 2011," Kevin Loffredi, vice president of annuity solutions for Morningstar, wrote in the report.
While sales remained "virtually flat" from the third quarter of 2010 to the fourth, fourth quarter sales increased dramatically over fourth quarter 2009. Carriers filed 63 material changes last quarter, according to the report, compared with just 36 in the fourth quarter of 2009. Twelve new contracts and 15 new benefits were issued last quarter, and three insurers – Ohio National, Pacific Life and Sun Life – issued new products.
Fees increased as well, though the report notes this is an indication that carriers are returning to more generous benefits and are "adjusting their prices accordingly."
