New LIMRA Tracking Shows Rise in Deferred Annuity Net Flows

Windsor, CT, June 6, 2007 — Total deferred annuity assets grew 1.2 percent during the first quarter of 2007, reaching nearly $1.97 trillion. The increase was reported in a new LIMRA analysis that will track industry deferred annuity net flows for variable, fixed-rate and indexed annuities each quarter.

“This new report will, for the first time, provide comprehensive, timely information on deferred annuity net flows, not just for variable but for fixed-rate and indexed products as well,” said Eric Sondergeld, corporate vice president and head of LIMRA Retirement Research. “This adds to LIMRA’s already substantial body of annuity data.”

Indexed annuities had the largest percentage increase, growing 5.9 percent to $109.1 billion while variable annuities grew 2 percent to $1.4 trillion. Fixed-rate annuity assets contracted 2.3 percent, ending the quarter with $450.5 billion. Variable annuities accounted for most of the growth in deferred annuity assets with investment earnings growing 1.7 percent, compared to 1 percent for fixed-rate annuities and 0.8 percent for indexed annuities.

LIMRA also reported that for the first quarter of 2007, individual annuity sales were $57.9 billion, a 2 percent increase over the first quarter of 2006. Variable annuity sales continued to grow with first quarter sales of $42.1 billion, up 8 percent compared to same quarter in 2006. This is just shy of the single-quarter record of $42.5 billion set in the second quarter of 2006.

Fixed annuity sales were down 12 percent to $15.8 billion as fixed annuity sales struggled in this difficult interest rate environment. Fixed annuities include fixed deferred annuities (fixed-rate and indexed annuities) as well as immediate annuities and structured settlements.

Sales of indexed annuities fell 11 percent to $5.7 billion. Also contributing to the drop in fixed annuity sales was a 20 percent decline in deferred fixed-rate annuity sales to $7.2 billion. Fixed immediate annuity sales increased slightly to $1.5 billion in the first quarter of 2007, up from $1.4 billion in the first quarter of 2006. Structured settlements remained flat at $1.4 billion.

The report also includes a table of the top 20 writers of overall total annuities, variable annuities, and fixed annuities ranked by first quarter 2007 sales results.

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