Record-Breaking Annuity Sales and Market Insights

Annuity sales in the United States reached $461.3 billion in 2025, marking a 6% increase and extending a trend of record-breaking results. This growth is driven by an increasing number of retirees and growing concerns about longevity risk. LIMRA, a prominent industry research organization, reported a 12% rise in sales during the fourth quarter, totaling $114.4 billion. It was the ninth consecutive quarter with sales surpassing $100 billion.

The annuity market has experienced significant growth over the past five years, with indexed products playing a pivotal role. These products now account for 45% of total sales, up from 24% a decade ago, according to Bryan Hodgens, LIMRA's senior vice president. Within the annuity segment, fixed-rate deferred annuities led with $160.6 billion in sales, while fixed indexed annuities set a new record with $128.2 billion. Registered index-linked annuities (RILAs) surged to $79.6 billion, experiencing a tenfold expansion in the last decade, and are projected to exceed $85 billion in sales by 2026.

Hodgens attributed the long-term growth to demographic changes, particularly the "Peak65" phenomenon, with over 4 million Americans retiring annually. Many retirees lack stable income sources, which fuels the demand for annuities. Supporting research from the Alliance for Lifetime Income indicates that a substantial portion of Americans aged 61 to 65 have less than $100,000 in assets. Additionally, LIMRA's findings show that 54% of baby boomers and Gen X investors are increasingly concerned about outliving their savings.

Interest rates have also impacted the market, with higher rates enhancing the appeal of fixed annuities as investment products. LIMRA data shows that crediting rates have consistently outpaced certificate of deposit rates by an average of 200 basis points. However, performance among U.S. annuity providers has varied significantly.

For instance, Lincoln Financial Group reported a significant 33% increase in fourth-quarter annuity sales to $4.9 billion, despite a reduction in net income for shareholders. Lincoln's CEO, Ellen Cooper, emphasized investments in infrastructure to support growth. Meanwhile, Prudential Financial recorded a fourth-quarter net income recovery to $905 million, driven by the success of its FlexGuard RILA products. Corebridge Financial, ranked as the third-largest annuity provider by LIMRA, experienced a 4% rise in full-year sales, with CEO Marc Costantini aiming to become a leading RILA provider.

Despite recent successes, future growth in the annuity market may face challenges. LIMRA projects a decline in fixed-rate deferred annuity sales as their short-term appeal diminishes amid potential interest rate reductions. Similarly, AM Best's senior director, Erik Miller, predicts moderate growth in the medium term, indicating that the robust pace witnessed recently may not be sustainable.