Annuity Industry Statistics 2024: Record-Breaking Sales and Key Market Trends
Barry Elad
Updated · Nov 23, 2024
The annuity market is poised for a landmark year in 2024. With increasing life expectancies, a volatile economy, and more people looking for secure retirement income, annuities have become an essential tool for financial planning. As we step into this new era, the annuity landscape is rapidly evolving, setting new records and reshaping the financial world. In this article, we’ll explore the key statistics and trends that define the annuity industry today, providing insights into its current growth, market dynamics, and the leading players.
Editor’s Choice: Record Annuity Sales and Key Trends
- Annuity sales in the U.S. reached an all-time high of $310 billion in 2023, a 22% increase compared to 2022.
- Fixed-indexed annuities (FIA) represented 42% of the total annuity market, as more investors sought principal protection combined with growth potential.
- Variable annuity sales continued to recover, showing a 15% growth from 2022, thanks to innovations like the introduction of new investment strategies and living benefit riders.
- The demand for registered index-linked annuities (RILAs) surged, contributing $50 billion to the total market by the end of 2023.
- The income annuity sector saw a significant rise, with sales jumping by 17%, driven by pre-retirees seeking guaranteed lifetime income.
- Digital platforms accounted for nearly 35% of all annuity sales in 2023, highlighting the growing role of technology in reshaping distribution channels.
- Retirement income planning continues to drive growth in the annuity market, with 68% of financial advisors recommending annuities to clients in 2023.
US Annuity Market Overview
- The U.S. annuity market represents the largest in the world, capturing 62% of the global annuity market in 2023.
- In 2023, over 50 million Americans held annuity contracts, with a significant increase in interest among Gen X and Millennial investors.
- The annuity industry in the U.S. generated $250 billion in premiums in 2023, a record-breaking year.
- Deferred annuities, offering tax-deferred growth, were the most popular, accounting for nearly 60% of all new contracts.
- Interest rate sensitivity remains a critical factor, with rising interest rates making fixed annuities more attractive to conservative investors.
- Inflation protection riders, which provide income adjustments based on inflation rates, saw a 25% increase in uptake among new contracts in 2023.
- Annuity providers have also expanded offerings that combine ESG (Environmental, Social, Governance) factors into their annuity products, reflecting a growing demand for socially responsible investments.
Total Annuity Market Growth
- The total annuity market size in the U.S. is expected to grow by 8% annually through 2024, reaching a total of $335 billion.
- Fixed annuity sales alone are projected to rise by 12%, driven by high interest rates and economic uncertainty, encouraging investors to lock in guaranteed returns.
- Registered index-linked annuities (RILAs), introduced less than a decade ago, are now expected to grow by 20% annually as more investors seek a middle ground between fixed and variable annuities.
- The baby boomer generation continues to drive market expansion, representing 70% of all annuity purchases in 2023.
- Fee-based annuities grew by 25% in 2023 as they became a preferred option among fiduciaries, who favor products without surrender charges.
- Annuity sales through independent agents remained strong, contributing 45% of all sales in 2023, while the bank channel accounted for 30%.
- The rise in longevity risk—the risk of outliving one’s savings—is pushing more Americans to consider lifetime income annuities, with 45% of pre-retirees expressing interest in these products in 2023.
| Metric | Projected Growth Rate (%) |
| Total Annuity Market | 8% |
| Fixed Annuity Sales | 12% |
| RILA Market Growth | 20% |
Top-Performing US Annuity Companies
- Athene topped the U.S. annuity market in 2023, with total sales of $29 billion, representing an impressive 15% market share.
- Jackson National followed closely, generating $28.5 billion in sales, capitalizing on its leading position in the variable annuity sector.
- New York Life remained a dominant force in fixed annuities, with $27 billion in sales in 2023, reflecting a 20% increase year-over-year.
- AIG Life & Retirement saw a boost in registered index-linked annuities, achieving $20 billion in RILA sales, contributing 30% of its overall annuity business.
- Equitable led the charge in digital transformation, with 40% of its annuities sold through digital platforms, reflecting its shift toward modern sales channels.
- Brighthouse Financial increased its market share in income annuities, recording $18 billion in total sales, driven by demand for lifetime income solutions.
- Nationwide expanded its product portfolio, resulting in $15 billion in annuity sales in 2023, particularly strong in fixed-indexed annuities (FIAs).
Fixed Indexed Annuities Performance
- Fixed indexed annuity (FIA) sales hit a new record of $90 billion in 2023, up 25% from the previous year, as investors sought principal protection with growth potential.
- FIAs provided an average 6% return for contract holders in 2023, outperforming traditional fixed annuities.
- Athene led the FIA market, with sales reaching $20 billion, capturing 22% of the total market.
- Principal protection features remained a key selling point, with 95% of new FIA contracts including guaranteed income riders.
- Market-linked bonuses, which allow policyholders to capture market gains up to a cap, were adopted in 60% of new FIA contracts in 2023.
- The average contract size for FIAs rose to $200,000, reflecting growing consumer confidence in these products.
- FIAs with uncapped strategies, offering higher growth potential without limits on returns, accounted for 35% of all new FIA sales in 2023.
| Metric | Figure |
| Average Return for Contract Holders | 6% |
| Athene’s FIA Sales | 22% |
| Contracts with Principal Protection | 95% |
| Contracts with Market-Linked Bonuses | 60% |
| Uncapped Strategy Contracts | 35% |
Fixed Annuity Sales
- Fixed annuity sales surged to $125 billion in 2023, a 30% year-over-year increase, driven by rising interest rates and market volatility.
- New York Life led the fixed annuity market with sales of $25 billion, capturing 20% of the sector.
- Multi-year guaranteed annuities (MYGAs) became the most popular type of fixed annuity, accounting for 60% of all fixed annuity sales.
- 3-year MYGAs offered the highest rates in 2023, with some contracts offering 4.5% to 5% annual returns.
- The demand for tax deferral benefits remained strong, with 80% of fixed annuity buyers opting for deferred contracts.
- Single premium immediate annuities (SPIAs), providing immediate income payouts, saw sales increase by 10%, driven by retirees seeking instant income streams.
- Fee-based fixed annuities became more common, with sales reaching $5 billion, as more advisors recommended products without traditional surrender charges.
Variable Annuity Sales
- Variable annuity (VA) sales rebounded in 2023, growing 15% year-over-year, to total $95 billion.
- Jackson National remained the leader in the VA market, generating $25 billion in variable annuity sales.
- Living benefit riders continued to drive VA sales, with 75% of contracts featuring these options for guaranteed lifetime income.
- Investment flexibility became a key selling point, with 80% of new VAs offering a wide range of subaccount choices tailored to various risk profiles.
- VAs with low-cost options, such as investment-only variable annuities (IOVAs), saw 20% growth in 2023, appealing to cost-conscious investors.
- ESG (Environmental, Social, Governance)-themed subaccounts gained popularity, representing 5% of the total VA market in 2023.
- Fee transparency became a growing demand, with 60% of buyers prioritizing products with clear and low administrative fees.
Registered Index-Linked Annuities Surge
- Registered index-linked annuities (RILAs) saw a sales surge in 2023, reaching $50 billion, a 20% year-over-year increase.
- Equitable led the RILA market with $15 billion in sales, capitalizing on investor demand for downside protection with upside potential.
- Protective Life recorded $10 billion in RILA sales, driven by its innovative offerings that allow policyholders to select customized risk levels.
- Cap rates on RILA contracts reached as high as 12% in 2023, offering attractive growth opportunities in a volatile market.
- Buffer annuities, a type of RILA that shields policyholders from market losses up to a certain percentage, accounted for 60% of total RILA sales.
- 5-year RILA contracts were the most popular, offering a balance of growth and downside protection.
- Income riders tied to RILAs gained traction, with 30% of buyers opting for these features to secure lifetime income.
Annuity Sales Channels
- Independent agents remained the leading sales channel, accounting for 45% of total annuity sales in 2023.
- Bank distribution represented 30% of annuity sales, thanks to strong partnerships between banks and annuity providers.
- Broker-dealers captured 20% of the annuity market, with an increased focus on fee-based products appealing to fiduciaries.
- Direct-to-consumer sales grew by 10% in 2023, as more consumers opted to purchase annuities through online platforms.
- Financial advisors played a crucial role, influencing 68% of annuity purchases in 2023 through personalized retirement planning.
- Digital sales platforms accounted for 35% of total sales, a significant jump from 25% in 2022, highlighting the shift toward tech-driven distribution.
- Hybrid advisory models—a combination of online tools and personal advisory services—became more popular, making up 15% of annuity sales.
Income Annuities Statistics
- Income annuities, designed to provide guaranteed lifetime income, saw sales increase by 17% in 2023, totaling $35 billion.
- Deferred income annuities (DIAs) gained popularity, with $10 billion in sales, as pre-retirees locked in future income streams.
- Single premium immediate annuities (SPIAs) continued to be a strong performer, generating $15 billion in sales in 2023, driven by retirees looking for immediate income.
- Guaranteed payout rates for SPIAs averaged 5.2%, offering an attractive option in a low-interest-rate environment.
- Lifetime income riders tied to variable and fixed annuities increased by 20%, with policyholders seeking inflation protection and spousal benefits.
- Longevity annuities, which start paying at a later age, saw a 10% growth in 2023, appealing to individuals concerned about outliving their assets.
- Qualified longevity annuity contracts (QLACs), which allow deferral of required minimum distributions (RMDs), accounted for $5 billion of income annuity sales in 2023.
Recent Developments
- Rising interest rates in 2023 significantly boosted the appeal of fixed annuities, leading to a 30% growth in sales.
- The introduction of ESG-linked annuities—products tied to environmentally and socially responsible investments—grew by 15%, reflecting the shift toward sustainable investing.
- AI-driven digital platforms began to reshape the annuity sales landscape, with 40% of customers using AI tools to compare annuity options and make purchasing decisions.
- Deferred annuities saw a boost as more people turned to tax-deferred growth options amid market volatility, driving $120 billion in sales.
- Annuity innovation continues to evolve, with several companies launching customizable products that allow buyers to tailor their annuities to specific financial goals.
- The SECURE 2.0 Act, which passed in 2023, made it easier for annuities to be included in 401(k) plans, leading to a 10% increase in employer-sponsored annuity sales.
- Fee-based annuities became more common as regulatory changes promoted transparency and lower costs in the advisory market, boosting these products by 25%.
Conclusion
The annuity industry in 2024 is stronger than ever, with record sales, innovative products, and digital advancements shaping its future. From fixed-indexed annuities to registered index-linked annuities, the demand for secure, lifetime income options continues to grow. As consumers look for stability and protection in uncertain economic times, annuities remain a key solution for retirement planning. With rising interest rates, new digital platforms, and a shift toward sustainable investments, the annuity landscape is set to continue its impressive expansion, offering investors a diverse range of options to meet their long-term financial goals.
Sources
Barry Elad
Barry Elad is a dedicated tech and finance enthusiast, passionate about making technology and fintech concepts accessible to everyone. He specializes in collecting key statistics and breaking down complex information, focusing on the benefits that software and financial tools bring to everyday life. Figuring out how software works and sharing its value with users is his favorite pastime. When he's not analyzing apps or programs, Barry enjoys creating healthy recipes, practicing yoga, meditating, and spending time in nature with his child. His mission is to simplify finance and tech insights to help people make informed decisions.
