RJ and Makay

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The life insurance and annuities industry, one of the largest sources of investment capital in the U.S., is expected to return to positive growth in 2012, according to the Federal Reserve. Businesses, governments and other organizations rely on life insurers to finance operations.  Industry revenues were hurt by the subprime mortgage crisis and financial market collapse. Revenue fell at an average annual rate of 6.2% to $745.6 billion in the five years leading up to 2012.

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Net variable annuity (VA) sales in 2011 were the strongest since 2007, the Insured Retirement Institute (IRI) reported Monday.  The insurance segment’s total year’s net sales came in at $27.7 billion, a 28% increase from 2010.  Fourth quarter 2011 net VA sales rose almost 35%, to $7.2 billion, up from $5.4 billion for the prior year’s period.  Q4 2011 was the second strongest quarter since mid-2008, the IRA said.

The sales of fixed annuities by banks were down a massive 52% from the same period last year, according to a joint report by Beacon Research and the American Bankers Insurance Association.

The $4.1 billion, fixed annuity sales were down 3.1% from the first quarter this year, the report found, although 60% of insurers polled saw an increase in fixed annuities sold through banks.

Western National Life dominated the bank channel with $1.2 billion of fixed annuities sold. New York Life is second with $686 million and Lincoln Financial sold $334 million.