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The Depository Trust & Clearing Corporation (DTCC) Insurance & Retirement Services (I&RS) released findings on activity and trends in the market for annuity products in 2012. The report is based on data, obtained from the millions of transactions processed by and entrusted to I&RS, which is available through its online Analytic Reporting for Annuities information service.
In 2012, I&RS processed more than 48 million transactions accounting for approximately $158 billion in annuity cash flows. The number of transactions was up 7.5% from 2011 and total cash flows increased by 1%.
The annuity transactions were processed for:
- 112 insurance company participants
- 116 broker/dealers
- 3,418 annuity products
Transactions processed by I&RS provide a view of a broad range of insurance companies and broker/dealers, with a particular concentration on nonâproprietary distribution.
Comparisons to prior periods
During 2012, inflows declined by $5.6 billion, or more than 6%, to $84.7 billion, from $90.3 billion in 2011. Out flows increased by $7.2 billion, or almost 11% in 2012, to $73.5 billion, from $66.3 billion in 2011. The decline in inflows and the increase in out flows resulted in a decrease of net cash flows to $11.3 billion from $24 billion in 2011.
The following table shows changes in inflows in some of the largest product types from 2011 to 2012.
| 2011 Inflows $B | 2012 Inflows $B | % Change | |
| Variable Annuity | 63.8 | 63.8 | 0.1% |
| Fixed Annuity | 11.3 | 7.5 | -33.4% |
| Group Annuity | 5.5 | 4.6 | -15.6% |
| Variable & Fixed Annuity | 6.6 | 4.3 | -35.7% |
| Fixed Immediate Annuity | 1.3 | 2.4 | 82.2% |
Transactions showed more than 50% of all annuity inflows went into IRA accounts, with 41% going into non-qualified accounts.
A comparison of fourth quarter cash flows shows that inflows declined by $1.8 billion in 2012 from 2011, but 2012 inflows were higher than in 2010. A large increase in out flows in Q42012 resulted in a decline in net cash flows to $410 million.
| Q4 2010 ($B) | Q4 2011 ($B) | Q4 2012 ($B) | |
| Inflows | 19.7 | 21.9 | 20.1 |
| Out flows | -14.9 | -15.9 | -19.7 |
| Net flows | 4.9 | 6.0 | 0.4 |
Comparing the third quarter and fourth quarters of 2012 shows a similar decline in inflows and increase in out flows, resulting in a 90% decline in net cash flows.
Net flows4.10.4
| Q3 2012 ($B) | Q4 2012 ($B) | |
| Inflows | 21.8 | 20.1 |
| Out flows | -17.7 | -19.7 |
During December, inflows increased by 3.5%, falling just short of $6.6 billion, from $6.4 billion in November. Out flows increased more than 7% to $6.7 billion, from $6.3 billion. Net cash flows declined $86 million in November to negative $140 million in December.
