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In its latest Annuity Market Activity Report, The Depository Trust & Clearing Corporation’s (DTCC) Insurance & Retirement Services (I&RS) identified key emerging trends in the annuities market from the first quarter of 2014.

The report shows that an 18% increase in first quarter 2014 cash inflows was offset by a 22% rise in cash out flows. At the same time, a 40% decline in overall net cash flows was indicated, resulting from increased cash flows into and out of annuity products, as compared to Q4 2013.

The report also details these top industry trends in greater detail:

  • Comparatively, inflows and net flows increased significantly into qualified accounts that meet IRS requirements to receive certain tax benefits.
  • A relatively small segment of distributors registered high net cash flows, reflecting an ongoing trend of concentration in retention among a small number of distributors.
  • Notable changes occurred in the top 10 insurance company rankings, with Prudential dropping from 2nd to 4th and Met Life dropping from 4th to 7th.
  • The top 10 annuity products continued to dominate, capturing a third of all industry cash inflows.

Findings from the report are based on insights from the online Analytic Reporting for Annuities service (commonly referred to as Analytic Reporting), which offers a snapshot of the annuities sector by delivering timely data based on actual transactions processed through DTCC’s National Securities Clearing Corporation (NSCC) subsidiary.

“Analytic Reporting provides unique insights from the transactions we process, aggregating and comparing large amounts of data for the industry,” said Andrew Blumberg, DTCC Director, I&RS. “The data snapshot in the report allows users to better understand what’s moving the market for annuity products and helps them take action to realize new opportunities within their competitive areas.”

The Annuity Market Activity Report is compiled each quarter as a service to the industry-at-large. Firms that subscribe to the Analytic Reporting service gain exclusive access to customizable reports, which breakdown insights by carrier, distributor, product, product type, account type, state, MSA, city and zip code.

Related reading: DTCC Annuity Market Activity Report, First Quarter 2014