The U.S. annuity market experienced a remarkable increase in Q3 2024, with total sales reaching $331.2 billion, marking a 23% growth over the same period last year. In Q3 of 2024 itself, the total annuity sales increased by 29% year over year to $114.6 billion.?
The rise in the annuity sales reflects multiple economic and demographic factors. Let’s check them out.?
- High Interest Rates and Market Volatility: Higher interest rates have made annuity products like fixed annuities more attractive as they offer better returns than prior years. So, those who are looking to avoid stock market risks, tend to shift towards annuity products that offer downside protection and steady income that’s ideal for a volatile market.?
- Growing Demand for a Guaranteed Income: When people are near retirement, they tend to seek stable income solutions. The rise in sales of products like registered index-linked annuities (RILAs) shows a preference for instruments combining growth potential with income security. (RILA sales set another quarterly record totaling $17.3 billion in Q3 of 2024.
- New Products: The market has seen the arrival of new RILA and FIA, enhancing customer choice. The increased availability of competitive options encourages people to consider annuities for long-term financial planning.?
So, these are some possible factors for the driving surge in annuity sales in Q3 2024 in the U.S.?
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