Low interest rates continue to weigh down annuity sales at Allianz Life Insurance Co. of North America, although the insurer enjoyed a big jump in operating profits due in part to a one-time sale of some investments.

Operating profits at the Golden Valley-based insurance company rose 48 percent to $559 million through the third quarter compared with the same period last year, the company said Friday. Key drivers of the profit growth included a one-time gain of $70 million on the sale of some bonds, and the fact that last year's operating profit was lower due to stock market volatility, boosting the year-over-year comparison.

Total assets under management grew 12 percent to $103.3 billion driven by strong investment returns, the company said.

Overall premiums, however, fell nearly 11 percent through the third quarter compared with the same period last year, to $7.4 billion.

Ultra-low interest rates have created a storm for the entire industry, said Sheryl Moore, head of AnnuitySpecs.com in Des Moines, affecting the attractiveness of products to policyholders, profits companies can make and the bonuses and commissions paid to agents.

"Every time we think it's bad and it can't get any worse than this, it does," Moore said in an interview Friday.

Annuities are a type of insurance product often used for retirement that give customers a regular stream of income payments. Fixed annuities offer a guaranteed payout; variable annuities are higher-risk and offer a stream of payments based on the performance of underlying investments.

Allianz Life's fixed annuity premiums fell 16 percent through the third quarter, compared with the same period last year, to $4.2 billion. Most of Allianz's fixed annuity business is fixed-index annuities that are tied to an external index such as the Standard & Poor's 500. The company dominates that market with top seller MasterDex X.

Allianz Life's variable annuity premiums fell 6 percent through the third quarter, compared with the same period last year, to $2.7 billion.

Like everyone else in the industry, Allianz has been repricing products and trying to design new ones that are more attractive in a low-interest-rate environment, said Marc Olson, Allianz Life's vice president of finance. The company also is working to open new channels for distributing its fixed annuities, such as selling them through banks and broker-dealers.

"We're seeing a growing appetite for that," Olson said, noting that Allianz is now distributing through independent broker-dealer LPL Financial.

Olson said he expects the annuity declines to start stabilizing in the current quarter and resume growth, on a quarter-to-quarter sequential basis, early next year.

"We're well-positioned to weather the storm," Olson said. "While sales have been declining, I think we're taking the right steps to stabilize and improve sales."

Jennifer Bjorhus • 612-673-4683