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DTCC: Annuity Inflows Totaled Over $90 Billion in 2011

January 25, 2012 at 08:26 AM
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Inflows into annuities hit more than $90 billion last year, according to a report from the Depository Trust & Clearing Corp. (DTCC) Insurance & Retirement Services (I&RS). The numbers were compiled from Analytic Reporting for Annuities, an online service provided by National Securities Clearing Corp., a DTCC subsidiary. The data was gleaned from transactions that the DTCC processes.

Monthly annuity inflows and net flows in 2011 are shown in the chart (left).

In December, inflows for all annuity types increased by nearly 13%, or more than $860 million, to $7.8 billion, up from $6.9 billion in November. Overall, the trend in inflows has been slightly down for the year, while the trend in net flows has been slightly up.

The DTCC report showed an increasing percentage of inflows being directed into IRA accounts in 2011, and a decreasing percentage of inflows going into non-qualified accounts. Specifically, non-qualified accounts are receiving less than 40% of cash flows. After remaining relatively flat for the past several months, inflows into 401(k) plans climbed from $362 million in November to nearly $749 million in December.

In terms of net cash flow, qualified plan accounts continue to garner most of the investment activity. Last year, regular IRA accounts amassed the greatest share of positive net cash flows at 77%. Meanwhile, 401(k) plans attracted 13% and non-qualified accounts drew only slightly less than 6% of positive net flows, far from the 39% of inflows going into these accounts.

Other findings in the report include:

  • Subtracting out flows from inflows, net cash flows decreased 2.5% to $1.84 billion in December from $1.9 billion in November.
  • The top 10 insurance companies accounted for more than 69% of all inflows processed in December and over 68% of all inflows processed in 2011.
  • In December, 561 annuity products saw positive net flows, while 2,264 annuity products saw negative net flows, where the amount redeemed exceeded the amount invested.
  • For the full year, 700 annuity products had positive net flows and 2,450 experienced negative net flows.
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