Annuity Market Achieves Unprecedented Growth in 2024
Annuity sales in the United States continued their upward trajectory in 2024, marking the third consecutive year of record-breaking performance. According to the LIMRA’s US Individual Annuity Sales Survey, the market saw significant gains, with total annual sales reaching a staggering $432.6 billion.
This figure represents a 12% increase compared to the previous year and underscores a broader trend of increased investor interest in annuity products. Total sales over the three-year period exceeded $1.1 trillion.
Quarterly Sales Remain Strong Despite Year-End Dip
While the annual figures paint a picture of robust expansion, the fourth quarter of 2024 experienced a slight downturn. US annuity sales totaled $100.6 billion during this period, a 13% decrease from the record-setting fourth quarter of 2023. This dip was partly attributed to lower interest rates, which impacted the sales of fixed-rate deferred (FRD) and income annuities.
Key Market Trends and Product Performances
Several annuity product categories showed notable performance throughout the year:
- Registered Index-Linked Annuities (RILA): RILA sales experienced substantial growth, increasing by 35% to $17.5 billion in the fourth quarter. For the entire year, RILA sales surged 38% to $65.4 billion, surpassing traditional variable annuity sales for the first time.
- Traditional Variable Annuities (VA): After three years of decline, traditional VA sales rebounded strongly in 2024. Fourth-quarter VA sales rose 35% year-over-year to $16.6 billion, bringing total annual sales to $60.8 billion, reflecting an 18% increase.
- Fixed Indexed Annuities (FIA): FIA sales remained strong, reaching $31.8 billion in the fourth quarter, despite a 10% decrease from the record-high third-quarter results. Total FIA sales for 2024 grew 32% to $126.8 billion.
- Fixed-Rate Deferred Annuities (FRD): FRD annuity sales saw a decline in the fourth quarter, falling by 52% year-over-year to $28.3 billion. Annual FRD sales also decreased by 8% to $152.3 billion.
Factors Driving Growth and Future Outlook
According to Bryan Hodgens, senior vice president and head of LIMRA research, the overall growth in the annuity market can be attributed to favorable economic conditions and heightened investor awareness of the protection and guarantees that annuities offer.
“This was a remarkable year for the US annuity market with nearly 80% of participating carriers reporting positive growth,” Hodgens said.
Despite the remarkable performance, LIMRA projects that total annuity sales won’t match the record levels of the past years. However, the organization anticipates total annuity sales to remain above $350 billion in 2025 and $300 billion through 2027.
