Insurance NewsNet

Fee-based VA Sales Jump 70% in 1Q

Sales of fee-based VAs, one of the industry’s best hopes for cracking the registered investment advisor channel, rose 70 percent to $780 million over the year-ago period, LIMRA reported.

Fee-based VAs have delivered steady growth over the past three quarters, although fee-based VA sales still only make up 3 percent of overall VA sales.

Last year, fee-based VA sales were $660 million in the fourth quarter and $550 million in the third quarter, data show. In 2017, fee-based VA sales reached $2.2 billion, or 2.7 percent of all VA sales, LIMRA said.

Fee-based annuities do not pay a commission to agents and come with different surrender charges or none at all.

Overall VA sales are expected to improve this year over last year as companies raise crediting rates for guaranteed living benefits and loosen restriction on investments, said Todd Giesing, annuity research director for LIMRA Secure Retirement Institute.

“Combined with the vacated Department of Labor fiduciary rule, we expect VA sales will improve throughout the year,” Giesing said. “As a result, LIMRA SRI is forecasting VA sales to be 0-5 percent higher in 2018, compared with 2017 results.”

Overall, U.S. annuity sales were $51.8 billion; level with first quarter 2017 results, LIMRA reported.

Fee-Based Indexed Annuity Sales Also Rise in 1Q

Fee-based sales of indexed annuities were $60 million in the first quarter, or about 0.42 percent of all indexed annuity sales, Wink’s Market & Sales Report reported. The 0.42 percent share was unchanged from the fourth quarter, when Wink first began keeping track.

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