New York, NY – October 31, 2013 – The Depository Trust & Clearing Corporation’s (DTCC) Insurance & Retirement Services (I&RS) business unit has released its most recent findings on activity and trends in the market for annuity products, including a 7% increase in inflows and a 98% increase in net cash flows in the third quarter over the second quarter. The information is based on data, obtained from the millions of transactions processed by and entrusted to I&RS, available to subscribers of its online Analytic Reporting for Annuities information service.
In the first nine months of 2013, $131 billion in annuity product transactions were processed by DTCC’s National Securities Clearing Corporation (NSCC) subsidiary for:
- 117 insurance company participants
- 135 distributor participants
- 3,394 annuity products
I&RS is connected to over 450 distribution and carrier firms representing product segments including life insurance, fixed and variable annuity products and distribution channels including banks, Brokerage General Agencies, Insurance Marketing Organizations and Insurance Broker Dealers. The transactions processed by I&RS provide a view of a broad range of broker/dealers with a particular concentration in nonproprietary distribution.
Comparisons to prior periods
The industry has seen significant growth in annuity inflows and net flows in 2013. Annuity inflows processed in the third quarter of 2013 increased by 7.4% to $25.1 billion from $23.3 billion in the second quarter. Net flows into annuity products increased by over 98% to $4.4 billion from $2.3 billion in the second quarter. Out flows declined by over 2% to $20.6 billion from $21.1 billion.
The industry is also showing growth compared to the same quarter in 2012. Comparing the third quarter of 2013 to the third quarter of 2012, inflows in Q3 2013 were nearly 15%, or $3.2 billion, higher. Net flows in Q3 2013 were over 8%, or over $343 million, higher. Out flows in Q3 2013 were over 16%, or $2.9 billion, higher than in the third quarter of 2012.
Comparing the first nine months of 2013 to the same period in 2012, inflows in 2013 were 7.6% higher than the same period in 2012, increasing to $69.5 billion from $64.6 billion. Net flows in 2013 were nearly 26% lower than the same period in 2012, decreasing to $8 billion from $10.8 billion. Out flows in 2013 were over 14% higher than in the same period in 2012, increasing to over $61 billion from over $53 billion.
In a reversal of a trend that has been running for several months, net cash flows into non-qualified accounts moved into positive territory, totaling over $746 million in the third quarter. In previous months more money was being taken out of non-qualified accounts than put in. Net flows into qualified accounts totaled nearly $3.7 billion in the quarter.
About Analytic Reporting
Analytic Reporting for Annuities is an online information solution containing aggregated data from transactions processed by DTCC's Insurance & Retirement Services (I&RS). I&RS is the central messaging connection for annuity and life insurance transactions, enabling insurance companies to provide broker/dealers with daily financial transaction information. It processes approximately 150 million transactions each month.
Because Analytic Reporting is based on processed transactions, not surveyed data, Analytic Reporting gives DTCC customers a unique and unprecedented view of their own business as well as the market for annuity products so that they can discover key trends and identify opportunities. With updates approximately two to three weeks after each month-end, Analytic Reporting allows users to assess their business and access industry intelligence to support management decisions about sales, sales management, marketing and product offerings. Analytic Reporting is a hosted turnkey solution, available online anywhere, anytime. DTCC customers don't have to store or manage the data. They don't have to develop applications or run SQL queries to obtain the business information they rely on for decision making.
Visit http://www.dtcc.com/analytics for more information about the Analytic Reporting Service.
DTCC has operating facilities and data centers around the world and, through its subsidiaries, automates, centralizes, and standardizes the post-trade processing of financial transactions for thousands of institutions worldwide. With 40 years of experience, DTCC is the premier post-trade market infrastructure for the global financial services industry, simplifying the complexities of clearance, settlement, asset servicing, global data management and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, derivatives, money market instruments, syndicated loans, mutual funds, alternative investment products, and insurance transactions. In 2012, DTCC’s subsidiaries processed securities transactions valued at approximately US$1.6 quadrillion. Its depository provides custody and asset servicing for securities issues from 131 countries and territories valued at US$37.2 trillion. DTCC’s global trade repositories record more than US$500 trillion in gross notional value of transactions made worldwide.