Annuities generated $60.6 billion in sales in the third quarter, up 4% year-over-over, according to a survey from LIMRA Secure Retirement Institute.
The increase was driven by robust sales of fixed-rate deferred and indexed annuities, LIMRA said.
Indexed annuities had an especially strong quarter, posting a record $14.3 billion in sales, up 22% from the same third quarter a year ago. While growth in indexed annuity sales occurred across the board, it was most pronounced in the bank channel, which now commands 18% of the indexed annuity market, up from 6% in 2011, according to LIMRA.
LIMRA credits the growth to product innovation. Banks have developed simpler products, without guaranteed living benefit riders, as an alternative to bank CDs, LIMRA noted.
Overall, the industry sold $27.7 billion in fixed annuities, a 21% jump from $23 billion a year ago.
"Despite the decline in rates, fixed annuity writers have been able to offer competitive rates. Coupled with the equity market volatility, we believe the safety of fixed products is being seen as a safe haven," said Todd Giesing, assistant research director of LIMRA Secure Retirement Research.
Variable annuities, in contrast, were hit hard by the market volatility, with sales falling 7% in the third quarter to $32.9 billion.
"There has been a significant shift in VA market share over the past several years," Giesing said. "Today, VA sales make up 54% of the overall annuity business, down from 67% just in 2012. This decline in VA market share has certainly contributed to the growth in the indexed annuity market."
The survey is based on data from 62 companies, representing 96% of total sales, LIMRA said.