Annuity Sales Surge to New Heights in 2024, Extending Record Run
Total annuity sales in the United States reached a staggering $432.6 billion in 2024, representing a 12% increase compared to the previous year. This marks the third consecutive year of record-breaking annuity sales, with a total of $1.1 trillion in sales over that period, according to the LIMRA’s US Individual Annuity Sales Survey.
In the fourth quarter of 2024, annuity sales totaled $100.6 billion, a slight 13% decrease from the record-setting fourth quarter of 2023. This minor dip was largely attributed to declining interest rates, which impacted sales of fixed-rate deferred (FRD) and income annuities.
Market Trends and Key Figures
Despite the overall strong performance, specific annuity types exhibited varying trends. Registered index-linked annuity (RILA) sales experienced significant growth, increasing by 35% to $17.5 billion in the fourth quarter and 38% to $65.4 billion for the entire year. This surge in RILA sales surpassed traditional variable annuity sales for the first time. Variable annuity (VA) sales also saw a positive trend, rising 35% year-over-year in the fourth quarter to $16.6 billion, culminating in an 18% increase, reaching $60.8 billion for the year.
Fixed indexed annuity (FIA) sales remained strong, reaching $31.8 billion in the fourth quarter, although representing a 10% decrease compared to the record third-quarter results; however, this was still 28% higher than the same period the previous year. Total FIA sales for 2024 grew by 32% to reach $126.8 billion. LIMRA anticipates FIA sales to stay over $100 billion in 2025, although lower interest rates could potentially diminish demand.
In contrast, fixed-rate deferred (FRD) annuity sales experienced a decline. They fell by 52% year-over-year in the fourth quarter, totaling $28.3 billion. Annual FRD sales also decreased by 8% to $152.3 billion. Even with this decrease, FRD sales are still anticipated to remain above $120 billion in 2025, a significant increase compared to pre-2022 levels.
Factors Driving Growth
Bryan Hodgens, senior vice president and head of LIMRA research, pointed to favorable economic conditions and heightened investor understanding of annuity protections and guarantees as key drivers of this widespread growth. “This was a remarkable year for the US annuity market with nearly 80% of participating carriers reporting positive growth,” Hodgens noted. He also highlighted that while the exceptional record levels of the past two years may not be repeated, LIMRA projects total annuity sales to stay above $350 billion in 2025 and $300 billion through 2027.
