The annuity market continued its upward trajectory in 2024, with total sales reaching $432.4 billion, a 12% increase from the previous year, according to LIMRA’s U.S. Individual Annuity Sales Survey. This marks the third consecutive year of record-high annuity sales, following $313 billion in 2022 and $385 billion in 2023. Experts anticipate another strong year in 2025.
Market Trends and Shifts
Despite an overall record-breaking year, declining interest rates in the second half of 2024 impacted demand for fixed-rate deferred and income annuities, leading to a 13% decline in sales for these products in Q4, totaling $100.4 billion.
Breakdown by Product Category
Fixed-Rate Deferred Annuities (FRDs)
- Q4 2024 sales: $29.4 billion (⬇️ 50% from Q4 2023)
- Total 2024 sales: $153.4 billion (⬇️ 7% from 2023)
- LIMRA forecasts a potential 25% decline in 2025 due to expected further interest rate drops, though reinvestments may sustain demand.
Fixed Indexed Annuities (FIAs)
- Q4 2024 sales: $30.4 billion (⬆️ 22%)
- Total 2024 sales: $125.5 billion (⬆️ 31%)
- FIA sales set a record for the third consecutive year, driven by investor demand for protection-based solutions. Despite lower interest rates, LIMRA expects sales to stay above $100 billion in 2025.
Income Annuities
- Single Premium Immediate Annuities (SPIAs): $3.1 billion in Q4 (⬇️ 14%), but annual sales hit $13.6 billion (⬆️ 2%)
- Deferred Income Annuities (DIAs): $1.1 billion in Q4 (⬇️ 17%), yet total sales rose 17% to $4.9 billion
Outlook for 2025
While declining interest rates may dampen demand for some annuity products, continued innovation, strong equity markets, and shifting investor preferences will likely sustain overall annuity sales. LIMRA’s full rankings of annuity providers will be available in mid-March following earnings reports. Contact the experts at Wholehan Marketing to see how your clients can benefit from annuities!