The Depository Trust & Clearing Corporation (DTCC) Insurance & Retirement Services (I&RS) released today March and first quarter information on activity in the market for annuity products from its award-winning Analytic Reporting for Annuities online information service, which leverages data from the transactions that DTCC processes for the industry. Analytic Reporting for Annuities is a service offering of National Securities Clearing Corporation, a DTCC subsidiary.
The charts for this release can be viewed at:http://www.dtcc.com/news/press/releases/2012/march.pdf.
- Annuity inflows processed by DTCC in March increased by almost 10%, to $7.7 billion from $7 billion in February.
- Out flows processed in March increased by almost 12% to $6.4 billion from $5.7 billion in February.
- Net flows were almost unchanged in March, increasing one half of one percent from just under $1.3 billion to just over $1.3 billion.
Inflows and net flows have increased in each of the first three months of 2012, breaking a declining trend in 2011.
The trend in activity over the past 13 months is reflected in the following chart.
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Inflows and net flows were down in the first quarter of 2012 compared to the first quarter of 2011. Out flows increased. The following chart provides the quarter-to-quarter comparison.
The increasing divergence of inflows between qualified accounts and non-qualified accounts continued in March. Inflows into qualified account types were slightly under 61% while inflows into non-qualified account types were slightly above 39%.
Although non-qualified accounts attracted 39% of inflows in March, net cash flows into non-qualified accounts were negative for the third month in a row, meaning that in each of the last three months more funds were withdrawn than added. The following chart shows monthly net cash flows in non-qualified accounts from January 2011 to March of 2012.
DTCC-RIIA Agreement
In August 2011, DTCC joined forces with the Retirement Income Industry Association (RIIA) to analyze cash flows by RIIA-defined broker/dealer distribution channels and product categories. For the six distribution channels defined by RIIA, the following are the percentages of inflows processed by DTCC I&RS in January:
- Independent broker/dealers – 29%
- Wirehouses – 16%
- Regional broker/dealers – 15%
- Bank broker/dealers – 14%
- Insurance broker/dealers – 9%
- Others – 18%