The planner will be posted on the department’s Web site following a demonstration of its use this afternoon at 1 p.m. by Bakke.
With interest rates slipping and the stock market in recovery, sales of variable annuities increased 11 percent in 2003 while sales of fixed annuities declined 15 percent from the record level set in 2002. Overall, individual annuity sales for 2003 reached $216.8 billion, off 1 percent from 2002 sales.
VA sales reached $129.2 billion in 2003, compared with $116.6 billion in 2002. Fixed annuity sales fell to $87.6 billion from the prior year’s $103.3 billion.
“Interest rates continued to decline, especially by mid-year,” said Eric Sondergeld, corporate vice president and head of retirement research at LIMRA International. “Many companies were forced to pull products where they couldn’t provide a rate above the state-mandated 3 percent, though many states began offering relief during the year. Also, the equity markets had a great year, which caused variable annuities to take center stage.”
VA premium placed directly into separate accounts increased each quarter during 2003, while VA premium placed directly into fixed accounts declined each quarter. Variable immediate annuity sales declined 15 percent from $607 million in 2002 to $518 million in 2003.
Fixed deferred annuity sales declined each quarter during 2003. Among the fixed deferred annuity product types, only equity indexed annuities were able to increase sales over the prior year. Fixed immediate annuity sales and structured settlement premium increased slightly, finishing 2003 with $5 billion and $6 billion, respectively.
Agents, both career and independent, accounted in about equal measure for approximately $82 billion in annuity sales, followed by banks at $50 billion. Stockbrokers sold some $32 billion of annuities, while financial planners and independent broker-dealers sold nearly $20 billion. Direct response and other channels accounted for the remainder.
The shift from fixed to variable products showed clearly in bank sales. Banks lead all other channels in fixed sales, but the totals fell from $36.9 billion in 2002 to $32.9 billion in 2003 while variable sales rose from $11.2 billion to $17.1 billion, a 54 percent increase. Banks increased their share of total sales by 4 percent.
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