Variable annuity sales continued their downward slide in the fourth quarter of 2012, as an industry in flux continued its shift away from guaranteed benefits to in part offering alternative investments instead as a diversification tool.
Overall sales trended downward compared with 2011, but were relatively even with 2010 levels, according to The Insured Retirement Institute (IRI), citing Morningstar and Beacon Research data.
However, an ongoing low-yield environment meant that sales of income annuities continued their record streak during the fourth quarter, and the plans remain in high demand as consumers look to generate guaranteed lifetime income.
A look at the numbers finds industrywide annuity sales for the fourth quarter reached nearly $50.6 billion, down 4.3% from $52.9 billion in the previous quarter and down 7.1% from $54.5 billion in the fourth quarter of 2011. For 2012, industrywide sales totaled $211.8 billion, down 8.4% from $231.1 billion in 2011, but relatively close to 2010 sales of $214.7 billion.
Fourth-quarter 2012 variable annuity sales totaled nearly $34.4 billion, down about 5.4 % from $36.3 billion in the third quarter of 2012 and down approximately 7.7% from $37.2 billion in the fourth quarter of 2011, according to Morningstar.
