Challenger annuity sales grew 53% to $880 million in the March quarter.

The figure breaks down into fixed-term product sales of $662 million and lifetime annuity sales of $218 million.

Fixed-term annuity sales were up 49% on the corresponding period last year, driven by the new MS Primary annuity deal and a strong close to the Japanese financial year.

Lifetime annuity sales were up 68% and demand for the Liquid Lifetime product continues to grow amid increased adviser recommendations.

The life business’ investment assets at March 31 were $14.9 billion, up by $300 million.

“Two things stand out in this result – the 53% increase in sales on last year and more than half of our sales were long term annuities,” Challenger CEO Brian Benari said.

“The significant increase in lifetime annuity sales reflects the strong and growing demand from retirees for products that provide income and protection against the risk of outliving their savings.”

Mr Benari says Challenger has continued to reweight its annuities book towards longer-term business, and this has been boosted by the contribution from long-dated fixed-term sales through MS Primary in Japan.

The company expects operating earnings for this financial year to be about halfway between its $620-$640 million guidance range.

It remains committed to its 18% pre-tax normalised return on equity target.