For US life insurers, the fourth quarter
of 2008 was a dismal one with sales performance in some sectors the
worst in over half-a-century of recording. But there was one bright
spot – fixed annuities – reported financial services organisation,
According to LIMRA, fixed annuity sales
continued their winning streak in the fourth quarter, soaring by 79
percent compared with the fourth quarter of 2007 to $34.9 billion.
This added to strong growth throughout the year, leaving total
fixed annuity sales in 2008 up 50 percent at a record $265
However, fixed annuity sales were barely
sufficient to offset a slump in variable annuity sales which after
a record year in 2007 followed the downtrend in the equity market,
to record sales of $33.6 billion in the fourth quarter, down 30
percent compared with the fourth quarter of 2007.
For the year as a whole, variable annuity
sales fell 15 percent to $155.6 billion, leaving totals sales of
fixed and variable annuities in 2008 at $265 billion, up a mere 3
percent compared with 2007.
Adding further to the industry’s woes, LIMRA
reports that based on annualised premiums, sales of individual life
insurance fell by 14 percent in the fourth quarter of 2008, marking
the single sharpest decline in sales since the fourth quarter of
1951. For 2008 as a whole, individual life insurance sales fell 7
The decline continued in January this year,
with market analytical company MIB Group reporting that sales of
individual life insurance fell by 4.3 percent year-on-year.