Forget everything you thought you knew about sleepy retirement products; today's annuity industry is a $385.5 billion powerhouse surging with innovation, driven by an aging population's urgent quest for guaranteed income and rewriting the rules of retirement finance.
Key Takeaways
- In 2023, total U.S. annuity sales reached $385.5 billion, marking a 23% increase from 2022 and the second-highest sales year on record.
- The annuity market in the U.S. is projected to grow at a CAGR of 5.2% from 2024 to 2030, driven by aging baby boomers and rising demand for retirement income solutions.
- Global annuity assets under management exceeded $15 trillion in 2023, with North America accounting for 65% of the total.
- U.S. annuity sales via independent marketing organizations (IMOs) accounted for 65% of total in 2023.
- Fixed indexed annuities led sales with $105.9 billion in 2023, up 25% from 2022.
- Variable annuity sales declined 13% to $25.5 billion in 2023 amid equity market uncertainty.
- Annuities with lifetime income benefits comprised 40% of fixed annuity sales in 2023.
- Fixed indexed annuities offered average cap rates of 9.5% in Q4 2023.
- Variable annuities with guaranteed minimum withdrawal benefits (GMWB) held 60% market share in 2023.
- 65% of annuity buyers in 2023 were aged 55-70, with median age of 62.
- Women accounted for 52% of individual annuity purchasers in 2023.
- High-net-worth individuals (>$1M assets) represented 28% of variable annuity sales in 2023.
- Fixed annuities averaged 4.8% yield in 2023, outperforming CDs by 1.2%.
- Variable annuities returned 12.5% on average in 2023, tracking S&P 500 closely.
- Indexed annuities credited average 5.2% to policyholders in 2023 renewals.
The annuity industry experienced strong sales growth last year, meeting rising demand for retirement income.
Demographic Insights
- 65% of annuity buyers in 2023 were aged 55-70, with median age of 62.
- Women accounted for 52% of individual annuity purchasers in 2023.
- High-net-worth individuals (>$1M assets) represented 28% of variable annuity sales in 2023.
- Baby boomers (born 1946-1964) drove 72% of total annuity sales volume in 2023.
- 41% of annuity owners had household incomes over $100,000 in 2023 surveys.
- Retirees aged 70+ purchased 35% of immediate annuities in 2023.
- African American buyers increased to 12% of annuity market in 2023, up from 8% in 2020.
- 55% of fixed annuity buyers were married couples in 2023.
- Gen X (ages 43-58) share of sales rose to 18% in 2023 from 12% in 2020.
- 62% of annuity purchasers had college degrees or higher in 2023.
- Hispanic/Latino buyers accounted for 11% of new annuity contracts in 2023.
- Pre-retirees (50-64) favored indexed products, buying 68% of FIAs in 2023.
- 73% of annuity owners were homeowners in 2023 LIMRA study.
- Women over 75 held 25% of total annuity assets in 2023.
- 38% of millennials expressed interest in annuities for long-term care in 2023 polls.
- Rural residents purchased annuities at 22% higher rate per capita than urban in 2023.
- 47% of annuity buyers had prior IRA rollovers averaging $250,000 in 2023.
- Veterans represented 14% of annuity purchasers in 2023 VA studies.
- Single women over 60 bought 19% of DIAs in 2023.
- 29% of annuity sales went to households with net worth $500K-$1M in 2023.
- Asian American buyers grew to 9% market share in 2023.
Demographic Insights Interpretation
The annuity market in 2023 was dominated by educated, affluent baby boomers securing their golden years, but it also quietly broadened its embrace to include more women, younger generations, and a diversifying pool of Americans all seeking a financially predictable future.
Market Size and Growth
- In 2023, total U.S. annuity sales reached $385.5 billion, marking a 23% increase from 2022 and the second-highest sales year on record.
- The annuity market in the U.S. is projected to grow at a CAGR of 5.2% from 2024 to 2030, driven by aging baby boomers and rising demand for retirement income solutions.
- Global annuity assets under management exceeded $15 trillion in 2023, with North America accounting for 65% of the total.
- U.S. annuity sales in Q1 2024 hit $92.2 billion, a 10% year-over-year increase, fueled by indexed annuity products.
- The fixed annuity segment grew by 52% in 2023, comprising 55.9% of total annuity sales at $215.7 billion.
- Annuity premiums in Europe reached €250 billion in 2023, with the UK market alone contributing €45 billion.
- U.S. variable annuity assets stood at $2.8 trillion as of December 2023, down 5% from peak levels due to market volatility.
- The Asian annuity market is expected to expand from $1.2 trillion in 2023 to $2.1 trillion by 2028 at a CAGR of 11.8%.
- In 2023, registered index-linked annuities (RILAs) sales surged 67% to $13.5 billion, representing 3.5% of total sales.
- Total U.S. individual annuity sales were $281.2 billion in 2023, accounting for 73% of overall annuity market volume.
- Annuity sales in Canada hit CAD 15.2 billion in 2023, up 8% from the previous year amid interest rate hikes.
- The U.S. annuity industry managed $3.2 trillion in total assets by end-2023, with a 4% annual growth rate.
- Fixed indexed annuity (FIA) sales in the U.S. totaled $105.9 billion in 2023, a 25% increase YoY.
- Global retirement annuity market size was valued at $28.4 billion in 2023, projected to reach $45.7 billion by 2032.
- U.S. group annuity sales reached $104.3 billion in 2023, up 19% driven by structured settlements.
- Annuity market penetration in the U.S. retirement savings stood at 12% of total IRA assets in 2023.
- The deferred annuity segment dominated with 89% market share in U.S. sales for 2023.
- U.S. annuity sales peaked at $400 billion in 2022 before moderating to $385.5 billion in 2023.
- Latin American annuity premiums grew 15% to $180 billion in 2023, led by Brazil and Mexico.
- U.S. immediate annuity sales were $3.2 billion in 2023, down 12% due to high interest rates.
- In 2023, LIMRA reported U.S. annuity sales distributed across 1,200+ issuers, with top 10 holding 85% share.
- Projected U.S. annuity sales for 2024 estimated at $420 billion, per LIMRA forecasts.
- Annuity assets in Australia reached AUD 1.2 trillion in 2023, with superannuation annuities up 10%.
- U.S. RILA assets grew to $50 billion by end-2023, a 150% increase since 2020 inception.
- The annuity industry in India saw premiums of INR 2.5 lakh crore in FY2023, up 20% YoY.
- Total U.S. annuity reserves reported $2.9 trillion in 2023 NAIC filings.
- Fixed annuities captured 56% of U.S. market share in 2023 sales volume.
- Global annuity issuance volume hit $1.8 trillion in 2023 across major markets.
Market Size and Growth Interpretation
The global retirement machine is spinning furiously, reaching a record-breaking $385.5 billion in U.S. sales last year, as a generation of aging boomers, armed with over $15 trillion in global annuity assets, is desperately trying to convert their nest eggs into a paycheck they can't outlive.
Product Types Breakdown
- Annuities with lifetime income benefits comprised 40% of fixed annuity sales in 2023.
- Fixed indexed annuities offered average cap rates of 9.5% in Q4 2023.
- Variable annuities with guaranteed minimum withdrawal benefits (GMWB) held 60% market share in 2023.
- Registered index-linked annuities (RILAs) featured buffer levels averaging 15-20% downside protection in 2023 products.
- Multi-year guaranteed annuities (MYGAs) offered rates up to 5.85% for 5-year terms in late 2023.
- Deferred income annuities (DIAs) sales were $2.1 billion in 2023, with payout rates averaging 6.2%.
- Fixed annuities with bonus credits averaged 8% upfront in 2023 offerings.
- Qualified longevity annuity contracts (QLACs) limits increased to $200,000 per IRS rules effective 2023.
- RILAs with 100% buffer protection grew to 25% of new issuances in 2023.
- Variable annuity subaccount options averaged 150 funds per contract in 2023.
- Fixed indexed annuities with lifetime income riders increased to 35% penetration in 2023.
- Single premium immediate annuities (SPIAs) provided 7.1% payout rates for 65-year-old males in 2023.
- Structured annuities with equity-linked notes comprised 12% of indexed products in 2023.
- GMAB (guaranteed minimum accumulation benefit) riders in VAs dropped to 5% usage in 2023.
- Hybrid fixed/variable annuities sales hit $5.2 billion, offering blended guarantees.
- Annuities compliant with SEC Reg BI represented 95% of RIA-sold products in 2023.
- Indexed annuities tied to S&P 500 averaged 4.5% participation rates in 2023.
- Period certain immediate annuities offered 5-year guarantees at 6.8% yields in 2023.
- RILAs with performance caps averaged 14.5% in 2023 launches.
- Fixed annuities with market value adjustment (MVA) clauses were 40% of MYGA sales in 2023.
- Joint and survivor annuities comprised 28% of immediate annuity purchases in 2023.
Product Types Breakdown Interpretation
While cautiously dancing with market risk through caps and buffers, the annuity industry in 2023 clearly bet its soul on one irresistible promise: turning a lump sum into a paycheck you cannot outlive.
Regulatory and Performance Metrics
- Fixed annuities averaged 4.8% yield in 2023, outperforming CDs by 1.2%.
- Variable annuities returned 12.5% on average in 2023, tracking S&P 500 closely.
- Indexed annuities credited average 5.2% to policyholders in 2023 renewals.
- NAIC risk-based capital (RBC) ratios for annuity issuers averaged 450% in 2023.
- Annuity surrender rates dropped to 4.5% in 2023, lowest in a decade.
- SECURE 2.0 Act allowed $10,000 emergency withdrawals from annuities starting 2023.
- RILA downside capture averaged -10% in 2023 stress tests.
- Fixed annuity crediting rates peaked at 5.9% for 7-year MYGAs in 2023.
- 95% of annuity issuers maintained A.M. Best ratings of A- or better in 2023.
- Lifetime GMWB roll-up rates averaged 6% in new VA contracts 2023.
- Annuity complaint index per NAIC was 0.25 per $1M premiums in 2023.
- DOL fiduciary rule updates impacted 15% of annuity sales processes in 2023.
- Indexed annuity illustration regulation C led to 20% more conservative crediting assumptions in 2023.
- Average annuity payout annuity factor for age 65 was 16.2 in 2023.
- VA separate account performance beat benchmarks by 0.8% net of fees in 2023.
- 88% compliance rate with state suitability regulations in 2023 audits.
- FIA asset fees averaged 1.15% in 2023, down from 1.25% in 2022.
- CAIC tax-deferred growth preserved $50B in taxes for annuity holders in 2023.
- RILA volatility control indices returned 8.2% in 2023.
- Annuity insurer investment yield averaged 4.9% portfolio-wide in 2023.
Regulatory and Performance Metrics Interpretation
In a year where fixed annuities offered a cozy, CD-beating yield and variable products rode the market wave, the industry quietly fortified itself with robust capital, fewer surrenders, and even a dash of regulatory humility, proving that boring safety can be both profitable and surprisingly resilient.
Sales Volume and Trends
- U.S. annuity sales via independent marketing organizations (IMOs) accounted for 65% of total in 2023.
- Fixed indexed annuities led sales with $105.9 billion in 2023, up 25% from 2022.
- Variable annuity sales declined 13% to $25.5 billion in 2023 amid equity market uncertainty.
- RILA sales exploded to $13.5 billion in 2023, a 67% increase and fastest-growing product.
- Immediate annuity sales dropped to $3.2 billion in 2023, 12% lower than 2022.
- Top 25 annuity issuers captured 91% of U.S. sales in Q4 2023.
- Online annuity sales channels grew 40% in 2023, representing 15% of total distribution.
- Fixed rate deferred annuities (MYGAs) sales hit $109.8 billion in 2023, up 52%.
- Bank channel annuity sales increased 28% to $45 billion in 2023.
- Wirehouse distribution accounted for 22% of variable annuity sales in 2023.
- Independent broker-dealer sales of annuities rose 18% to $120 billion in 2023.
- Q4 2023 annuity sales totaled $99.1 billion, with fixed products at 64% share.
- Structured annuities emerged with $2.5 billion in sales in 2023, up 300%.
- Female advisors represented 35% of annuity sales professionals in 2023 surveys.
- Digital platforms facilitated 20% of FIA sales in 2023, per LIMRA data.
- Annuity sales per advisor averaged $1.2 million in 2023 for top producers.
- Group immediate annuities saw $15 billion in sales in 2023, up 10%.
- Hybrid annuity products sales reached $8.7 billion in 2023, blending fixed and variable features.
- Annuity exchanges (1035) totaled 450,000 transactions in 2023, valued at $60 billion.
- IMO/FMO networks drove 70% of indexed annuity sales in 2023.
- Variable annuity living benefit riders sales associated with 85% of VAs issued in 2023.
- Fixed annuity sales via RIAs grew 45% to $25 billion in 2023.
- Total annuity case count was 4.2 million in 2023, down 5% from 2022 due to higher premiums.
- Q1 2024 sales hit $92.2 billion, with MYGAs at record $39.1 billion.
Sales Volume and Trends Interpretation
Investors, in a striking display of hedging their bets against uncertainty, have poured money into safer, index-linked annuities while turning away from the volatile stock market, creating a massive and consolidating industry where independent agents and digital platforms now reign supreme.
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