Annuity Sales Rise

NEW YORK ( TheStreet) -- Variable annuity (VA) sales increased by 11 percent in the second quarter while fixed annuity decreased by 26% compared to the second quarter of last year, according to Life Insurance Marketing Research Association's (LIMRA) U.S. Individual Annuities Second Quarter 2010 Sales Report.

"We are seeing broad growth across variable annuity sales," said Joe Montminy, assistant vice president director of annuity research for LIMRA who also pointed out that overall fixed and variable annuity sales were up from last quarter. "There have been a lot of changes to the VA product and sales people are starting to feel comfortable with the changes to the guarantee riders."

Insurers sometimes offer additions, or riders, to traditional variable annuity contracts. These come in the form of guaranteed minimum death benefits and guaranteed minimum withdrawal benefits.

Total sales of variable annuities were $67.9 billion, while total fixed annuity sales were $40.5 billion this year so far.

"Fixed annuity sales reached a record high in 2009. Because of the interest rate environment and the decline in interest rate spreads, those sales declined this year," Montminy said.

Prudential Annuities ( PRU) topped the ) list of companies selling variable annuities, with $10.1 billion in sales. The insurer was followed closely by Metlife ( MET), TIAA-CREF ( TICRX) and Jackson National Life . New York Life was the largest seller of fixed annuities with $3.6 billion in sales. New York Life was followed by American International Group ( AIG), and Allianz Life of North America.

"Most companies in the top twenty experienced VA sales growth this quarter--whereas last year we saw growth concentrated with the top five carriers," added Montminy. "There increased confidence in the long-term stability of variable annuities."

-- Written by Maria Woehr in New York.

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