Demand for variable annuity
(VA) products in the US remained strong in the second quarter of
2011 with sales rising by 20% compared with the same period in 2010
to $40.9bn, financial services organisation LIMRA has reported. The
second quarter of 2011 was the fifth quarter in a row in which
increased VA sales were recorded. VA sales in 2010 increased by
9.8% compared with 2009 to $140.5bn.

LIMRA assistant
vice-president of annuity research Joseph Montminy said: “Recent
market volatility will certainly affect third quarter VA sales but
consumer demand for guaranteed income protection will continue to
drive sales of VAs with guaranteed living benefit
riders.”

Montminy added that
guaranteed living benefit riders formed part of 87% of VA sales in
the second quarter of 2011.

Despite falling interest
rates, fixed annuity research firm Beacon Research reports that
there was positive news in the fixed annuity market in the second
quarter of 2011. During the quarter, fixed annuity sales lifted by
8% compared with the prior quarter to $20.4bn, taking sales in the
first half of 2011 to $39.3bn, an increase of 3% compared with the
first half of 2010.

Across both VAs and fixed
annuities, MetLife was the top performer in the first half of 2011,
registering total sales of $13.62bn, according to LIMRA. MetLife
sales were dominated by VAs which accounted for $12.65bn of its
total annuity sales.

In the VA sector MetLife was
followed by Prudential Financial with sales of $11.35bn, and UK
insurer Prudential’s unit Jackson National with sales of
$9.53bn.

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In the fixed annuity sector American International Group
companies took top position in the first half of 2011 with sales of
$5.2bn, followed by New York Life with sales of $3.77bn and Allianz
Life of North America with sales of $3.44bn.

Chart showing sales of top insurers in the first half of 2011 in the US annuity market