Variable annuity demand has been increasing for over a year now, according to Bloomberg’s “U.S. Variable Annuity Sales Rise 24% Led By Prudential, MetLife.” Noah Buhayar’s article says that variable annuity sales have increased for five straight quarters as the stock market has risen. Prudential Financial and MetLife have led the way in variable annuity sales and their increases have helped the industry thrive. Sales were up 24% from the first quarter of last year to the first quarter of this year. Prudential sold $6.81 billion of the total $38.9 billion. They were the top variable annuity seller and saw an increase of 40% from last year. MetLife’s $5.68 billion in variable annuities was the second most sold and a 41% increase from last year.
Many changes are expected in the variable annuity industry, which could be one reason for the increase in sales. Investors are trying to lock in guaranteed benefits like death benefits and guaranteed annuity rates for payouts before any changes occur. Equity linked variable annuity products saw large sales as the stock market increased from its lows in March of 2009. Last year the S & P 500 increased 13%, followed by a 5.4% increase in the first quarter of this year. The stock market increase and a possible worry about increasing fees or changes in benefits are a good part of the reason for the variable annuity sales increase.
