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Investors interested in growth and protection propel registered index-linked annuity (RILA) sales to new all-time record

WINDSOR, Conn., Oct. 25, 2023 — With economic conditions continuing to be favorable for annuities, total sales increased 11% year-over-year to $89.4 billion in the third quarter 2023, according to preliminary results from LIMRA’s U.S. Individual Annuity Sales Survey.

“Equity markets rebounding in 2023 combined with a strong increase in interest rates has allowed insurance companies to add additional value in their annuity offerings to investors,” said Todd Giesing, assistant vice president, LIMRA Annuity Research. “LIMRA expects 2023 sales will surpass the record sales set in 2022.”

In the first nine months of 2023, total annuity sales increased 21% to $270.6 billion.

RILA sales hit a new quarterly record, totaling $12.6 billion in the third quarter of 2023, up 19% from the prior year. Through the third quarter of 2023, RILA sales were $34.4 billion, 11% higher than the same period in 2022. LIMRA is predicting RILA sales to have another record-breaking year in 2023, likely increasing at least 10%.

“Investors still seem focused on the value of protection and growth potential that RILAs offer,” Giesing notes.

Fixed indexed annuity (FIA) sales were $23.3 billion in the third quarter, up 9% from the prior year’s results. Year-to-date (YTD), FIA sales increased 25% to $71.7 billion.

Income annuity products have benefited from continued rising interest rates. Single premium immediate annuity (SPIA) sales were $3 billion in the third quarter, 20% higher than the prior year’s results. In the first nine months of 2023, SPIA sales jumped 63% to $9.8 billion.

Deferred income annuity (DIA) sales were $950 million, increasing 88% from sales in the third quarter 2022. In the first nine months of the year, DIA sales jumped 104% to $2.8 billion.

“Income annuities will hit record levels in 2023, with sales in this category expected to exceed $16 billion for the year,” Giesing notes.

Fixed-rate deferred (FRD) annuity sales were $34.4 billion in the third quarter, a 13% increase from prior quarter and 15% higher than third quarter 2022 results. YTD, FRD sales totaled $106.4 billion, up 43%.

“While the average FRD annuity crediting rates continue to outperform CD rates, the gap has diminished. Investors — feeling more confident in the economy — are shifting to RILAs and FIAs seeking the potential for greater returns,” said Giesing. “That said, with a significant amount in FRD contracts coming out of surrender this year, LIMRA expects a portion of those assets to be reinvested in FRD products driving total FRD sales to another record year."

Traditional variable annuity (VA) sales remain far below the results from the prior year. Traditional VA sales were $13.1 billion in the third quarter, down 7% from third quarter 2022 results. YTD, traditional annuity sales totaled $39.2 billion, falling 20% compared with the same period in 2022. While economic conditions are improving for traditional VA products, with the slow start to the year, LIMRA is forecasting sales growth in this category to be down in 2023.

Preliminary third quarter 2023 annuity industry estimates are based on monthly reporting, representing 83% of the total market. A summary of the results can be found in LIMRA’s Fact Tank.

Third quarter 2023 top 20 rankings of total, variable and fixed annuity writers will be available in mid-November, following the last of the earnings calls for the participating carriers.

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