Demand for protected growth fuels annuity industry sales surge, Nationwide Annuity leader says

LaiFook: Total annuity sales through the third quarter reached $355 billion, a 2% increase year-over-year. Products that combined protection with upside potential have seen the strongest growth. Registered index-linked annuity (RILAs) sales rose 21% year over year to $70 billion, while traditional variable annuity (VA) sales increased 17% to $53 billion, according to LIMRA.

Several factors have pushed the industry to new highs this year, including rising interest rates, continued strength in the equity markets and an aging U.S. population moving closer to retirement. With a significant portion of the Peak 65 generation nearing retirement without a pension, annuities remain an important option for generating protected income.

Nationwide's results reflect these broader trends. Our 2026 annuity sales have positioned us among the top 10 players in both the variable and fixed annuity markets, according to LIMRA. We believe our diversified product portfolio, broad distribution, disciplined strategy and focus on extraordinary care position us well in changing market conditions. These strengths help us meet evolving investor needs and deliver on our promises for the long term.

LaiFook: Although all annuity product categories have seen quarter-over-quarter growth at some point this year, traditional VAs and RILAs have been in particularly strong demand. With equity markets hovering near record highs, RILA's combination of market growth potential and downside protection is especially attractive to investors. Traditional VAs have also benefitted from strong equity market performance and enhanced living benefits. Higher interest rates enable carriers like Nationwide to provide greater value across nearly all types of annuities.

While these products are resonating in the marketplace for good reason, other types of annuity solutions can be tailored to a client's unique goals and circumstances, so advisors should explore all available options to find the right fit. For example, high earners and high-net-worth individuals who have maxed out qualified plans may want to consider contributions through investment-only variable annuities (IOVAs). Fixed indexed annuities (FIAs) can also guarantee that investors will not lose their investment or credited earnings due to the performance of underlying indexes, offering advisors and their clients more flexibility and choice as they navigate today's markets.

In fact, Nationwide, Annexus and Capital Group recently added two index strategies and a strategy linked to the American Funds® Growth Fund of America® Class F-3 mutual fund¹ within the Nationwide New Heights® Select suite. These additions give financial professionals and their clients new opportunities for growth potential within a risk-managed solution that offers 100% principal protection from market losses.

LaiFook: Nationwide expects 2026 will be another record-setting year for the annuity industry. However, advisors should pay attention to the following trends that could influence product sales:

• Inflation: Inflation remains an important planning consideration as clients look for ways to preserve purchasing power. According to the Labor Department's most recent report, U.S. inflation remained stubbornly high at 3.4% in August. In a volatile market, VAs and FIAs can help clients keep pace with inflation over the long term. Both options can help clients establish a foundation of protected lifetime income while allowing them to allocate the rest of their portfolio to assets that may help combat inflation.

• Interest rates: Nationwide's Office of Economics believes data supports further interest rate hikes in coming months as inflation continues to run at nearly twice the Federal Reserve's two percent target. While the Fed elected to hold rates steady in October, the FOMC is still likely to hike again in December and once more in early 2027. If rates continue to rise, carriers with a diversified product lineup will be best positioned to meet varying client needs.

• Equity markets: Equity markets are likely to remain strong but volatile, according to Nationwide's Chief Market Strategist Mark Hackett, fueling continued demand for VAs and RILAs. Advisors should look for carriers that prioritize differentiation and enhanced consumer value in these products. Nationwide believes investors shouldn't have to choose between growth potential or income. That's why we offer VAs with strong investment lineups that provide access to full menus even when investors select an income rider.

LaiFook: Investor anxiety around high inflation, market volatility and lengthening lifespans is unlikely to go away anytime soon. However, in any economy and at every stage of the financial life cycle, annuities can provide protection and guaranteed income for investors.

In fact, according to a survey from Nationwide, 76% of annuity owners are confident they will be able to retire when they want, compared with only 49% of those who do not own annuities. Additionally, 70% of consumers said they were confident they would receive annuity income payments as promised, compared with only 61% who said they were confident they would receive their full Social Security benefits.

Annuities are among the few financial products that can provide guaranteed income for life no matter how long someone lives and regardless of the economic environment. This presents an opportunity for financial professionals to connect with investors who don't currently own an annuity and determine whether one aligns with their financial goals and retirement plans.