DTCC: Annuity Product Activity for December Up 13%
January 24, 2012 by N/A
NEW YORK–(BUSINESS WIRE)– The Depository Trust &
Clearing Corporation (DTCC) Insurance & Retirement Services (I&RS)
released today full-year and December 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/dec.pdf.
- Inflows processed by DTCC in 2011
totaled over $90 billion - DTCC processed nearly 45 million
transactions categorized as inflows and out flows in 2011 - Net flows in 2011 totaled almost
$24 billion - Inflows for all annuity types
processed in December increased nearly 13%, or over $860 million, to $7.8
billion from $6.9 billion in November. - Subtracting out flows from
inflows, net cash flows decreased 2.5% to $1.84 billion in December from
$1.9 billion in November. - The top 10 insurance companies
accounted for over 69% of all inflows processed in December and over 68%
of all inflows processed in 2011. - Five hundred sixty one (561)
annuity products saw positive net flows in December, while 2,264 annuity
products saw negative net flows, where the amount redeemed exceeded the
amount invested. - For the full year, 700 annuity
products had positive net flows and 2,450 experienced negative net flows.
The overall trend in inflows has been slightly down for
the year, while the trend in net flows has been slightly up.
Transactions processed by DTCC show an increasing percentage of inflows being
directed into IRA accounts in 2011, and a decreasing percentage of inflows
directed into non-qualified accounts. Non-qualified accounts are receiving less
than 40% of cash flows. After remaining relatively flat for the past several
months inflows into 401(k) plans jumped from $392 million in November to almost
$749 million in December.
Looking at the net cash flow (subtracting out flows from inflows) distribution
displays the greater persistence, or “stickiness,” of investments into qualified
plan accounts. In 2011 regular IRA accounts took the lion’s share of positive
net flows with 77%. 401k plans attracted 13%, and non-qualified accounts
attracted only slightly less than 6% of positive net flows, far from the 39% of
inflows going into these accounts.
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 the
I&RS in December:
- Independent broker/dealers – 25%
- Wirehouses – 23%
- Regional broker/dealers – 15%
- Bank broker/dealers – 12%
- Insurance broker/dealers – 9%
- Others – 16%
About DTCC
DTCC, through its subsidiaries, provides clearance, settlement and information
services for equities, corporate and municipal bonds, government and
mortgage-backed securities, money market instruments and over-the-counter
derivatives. In addition, DTCC is a leading processor of mutual funds and
insurance transactions, linking funds and carriers with their distribution
networks. DTCC’s depository provides custody and asset servicing for more than
3.6 million securities issues from the United States and 121 other countries
and territories, valued at US$36.5 trillion. In 2010, DTCC settled nearly
US$1.66 quadrillion in securities transactions. DTCC has operating facilities
and data centers in multiple locations in the United States and overseas. For
more information, please visit www.dtcc.com.
About Analytic Reporting and I&RS
Analytic Reporting for Annuities is an award-winning online information
solution containing aggregated data from transactions processed by the I&RS
of DTCC. 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. I&RS 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
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 to DTCC
customers. 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.
See DTCC’s web site at http://www.dtcc.com/analytics
for more information about the service.
The Depository Trust & Clearing Corporation
Crystal Bueno, 212-855-5473
Source: The Depository Trust & Clearing Corporation
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