Individual Annuity Sales Improve in first quarter of 2008: LIMRA

WINDSOR, Conn., June 2, 2008 – For the first quarter of 2008, U.S. individual annuity sales rose nine percent over the first quarter of 2007 reaching $63.4 billion, according to LIMRA.

“For the first time since the third quarter of 2006, fixed annuity sales growth exceeded variable annuity sales growth,” said Joe Montminy, research director at LIMRA. “Short-term interest rates on CDs declined sharply in the first quarter of 2008 while the average interest rate on one-year fixed annuities, including any bonus, experienced only a slight decline. This improving interest rate spread, coupled with a volatile and declining equities market, made fixed annuities an attractive option in the first quarter of 2008.”

Total fixed annuity sales continued to grow as first quarter sales improved to $21.3 billion, up 31 percent compared to the same quarter from a year ago. Fixed annuities include fixed deferred annuities (book value, indexed, and market-value adjusted annuities), as well as immediate annuities and structured settlements. Fixed deferred annuity sales jumped 34 percent to $18.0 billion while fixed immediate sales improved 21 percent to $1.7 billion and structured settlements gained 7 percent, reaching $1.6 billion when compared to the same quarter from a year ago.

Sales of variable annuity slowed when compared to the sales growth over the last couple of years, rising only one percent over the first quarter of 2007, reaching $42.1 billion.

Industry deferred annuity assets declined for a second consecutive quarter, down 3.9 percent to $1.94 trillion in the first quarter of 2008. Total inflows exceeded outflows yet losses in investment earnings brought down the ending assets. To view the net flow results, please visit: Industry Deferred Annuity Net Flows Estimates First Quarter, 2008.

A list of the top 20 writers of overall total annuities, variable annuities and fixed annuities ranked by first quarter 2008 sales results, as well as the first quarter Annuities Industry Estimates Chart can be found in the updated Data Bank.

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