US individual annuity considerations hit a record high in 2023 as the product line grew 21.5% compared to the previous year.

The industry logged $347.68 billion in individual annuity considerations in 2023, an increase of roughly $61 billion from the $286.15 billion seen in 2022. The record-breaking rise is the largest increase in direct premiums written for individual annuities in the last two decades, according to an S&P Global Market Intelligence analysis.

Growth for top insurers

The majority of the top 15 individual annuity insurers saw substantial year-over-year growth in premiums in 2023. Of the 11 insurers that saw their premiums rise, eight booked a double-digit increase.

Athene Holding Ltd. maintained its spot from 2022 as the largest holder of the individual annuity market share, having written $36.01 billion in direct individual premiums and considerations. The insurer also saw the largest year-over-year increase in premiums of 74%.

During Athene parent company Apollo Global Management Inc.'s fourth-quarter 2023 earnings call, CEO Marc Rowan said that the company has been making changes to its offering since it entered the market roughly 10 years ago.

"We stripped down many of the unused providers ... and simplified the product and simplified the administration of the product," Rowan said. "That has allowed us, along with capital and good asset availability, to move from a new entrant to the market to the largest-ever year of annuity sales in 2023 and a leading market position."

Massachusetts Mutual Life Insurance Co. wrote $24.63 billion in direct individual premiums and considerations in 2023, making it the second-largest holder of the individual annuity market share. The insurer also saw the second-highest year-over-year growth in premiums with a 32.5% increase.

New York Life Insurance Co. saw the biggest year-over-year decrease in premiums with a 24.1% drop. It was the second-largest holder of the individual annuity market share in 2022 but fell to seventh in 2023.

The annual US regulatory statements now include direct annuity consideration and benefits incurred for six distinct individual annuity product types — fixed, index, variable annuity with guarantees, variable annuities without guarantees, life contingent payout and other. S&P Global Market Intelligence analysis has adjusted the as-reported consideration or premium breakout of the individual annuity products for American Equity Investment Life Holding Co. and Brighthouse Financial Inc. to better align with details provided within its annual 10-K filings. Click here to read more about the changes in the annual US insurance statements.

Fixed annuities most popular

Among individual annuity products, fixed annuities brought in the highest amount of premiums in 2023 at $140.66 billion. Indexed annuities were the second-most popular product with $102.02 billion in premiums in 2023.

Market leader Athene wrote the largest amount of fixed annuity premiums at $24.28 billion and the second-largest amount of indexed annuity premiums at $10.88 billion.

With $11.16 billion in premiums, Allianz SE was the top provider of indexed annuities in 2023.

American Equity reported that 93% of its total annuity deposits were in indexed annuity products in 2023, which translated to an estimated consideration value of $7.07 billion, making the insurer as fourth-largest index annuity writer.

Variable annuities were the third most-utilized product in 2023. Premiums for products with and those without guarantees reached $84.28 billion.

Sales of traditional variable annuities have been waning over the past several years as the popularity of Registered Index-Linked Annuity (RILA) has risen. The product has similar features as a fixed-index annuity in that they provide market-loss protection, although clients may still experience some losses.

LIMRA reported that roughly 48% of the variable annuity sales were in the RILA product in 2023.

Equitable Holdings Inc., the market leader in RILA sales according to LIMRA, wrote the highest amount of variable annuity considerations with $15.42 billion in the product line.

Brighthouse Financial is reported by LIMRA to be the second-largest writer of RILA products in the US. The company's flagship Shield products accounted for roughly 91% of its variable annuity deposits in 2023. The North Carolina-based company had an estimated $7.59 billion in total variable annuity considerations during the year, placing the company in fourth place in the variable annuity rankings.

Jackson Financial Inc. wrote $12.14 billion in variable annuities in 2023, making it the second-largest provider of the product during the year. The insurer's traditional variable annuity sales accounted for 78.1% of its variable annuity sales during the year.

– Read an article about the US pension risk transfer market. – Read an article about interest in life and annuity targets.