20 ID Trends 2020
Annuity Trends
Forecasts rebound for most annuity products by 2021
“ Most annuity products will face headwinds under the current economic conditions .”
Todd Giesing , senior research director , SRI Annuity Research
The Secure Retirement Institute ® ( SRITM ) is forecasting U . S . annuity sales will struggle in 2020 . The COVID-19 pandemic triggered ultra-low interest rates , extreme market volatility and record-high unemployment — conditions that generally are unfavorable for annuity sales . Overall , SRI is forecasting total annuity sales to drop between 8-15 % in 2020 .
The good news is the outlook for 2021 and 2022 is brighter . As equity markets and interest rates slowly rise over the next two years and the number of people age 65 and over expands to comprise 18 % of the U . S . population , SRI is forecasting the annuity market to rebound and make up the losses incurred in 2020 .
“ Most annuity products will face headwinds under the current economic conditions ,” noted Todd Giesing , senior research director , SRI Annuity Research . “ However , registered index-linked annuities ( RILAs ), which offer investment growth opportunity with limited downside risk , are uniquely positioned to thrive in this environment and successfully compete for clients who may have looked to indexed annuities in the past . We expect RILAs to expand their VA market share over the next few years .”
Secure Retirement Institute ’ s U . S . Annuity Sales Forecast for 2020-2022
2019 2020 2021 2022
Variable annuities |
$
101.9
|
+ 2 %
|
$ 89 – $ 94 |
$ 96 – $ 101 |
$
105 – $ 110
|
Variable annuities ( non-RILA ) |
$
84.5
|
– 5 %
|
$ 70 – $ 75 |
$ 73 – $ 78 |
$
75 – $ 80
|
Registered index-linked annuities ( RILA ) |
$
17.4
|
+ 55 %
|
$ 19 – $ 21 |
$ 23 – $ 25 |
$
29 – $ 31
|
Fixed annuities |
$
139.8
|
+ 5 %
|
$ 116 – $ 128 |
$ 112 – $ 124 |
$
119 – $ 130
|
Indexed annuities |
$
73.5
|
+ 6 %
|
$ 55 – $ 60 |
$ 65 – $ 70 |
$
73 – $ 78
|
Fixed-rate deferred annuities |
$
47.5
|
+ 4 %
|
$ 46 – $ 51 |
$ 33 – $ 38 |
$
36 – $ 41
|
Income annuities |
$
12.4
|
+ 3 %
|
$ 7 – $ 8 |
$ 9 – $ 10 |
$
11 – $ 12
|
Structured settlements |
$
6.5
|
+ 4 %
|
$ 6 – $ 7 |
$ 6 – $ 7 |
$
6 – $ 7
|
Total |
$
241.7
|
+ 3 %
|
$ 205 – $ 222 |
$ 208 – $ 225 |
$
229 – $ 246
|
Source : A Future View of U . S . Annuity Sales — Will History Repeat Itself ? U . S . Individual Annuity Market Forecast 2020 – 2022 ( 2020 ), Secure Retirement Institute