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June 10, 2001 at 08:00 PM
American General Vaults To Top Spot In Bank Annuity Sales
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American General Life Insurance surged to first place in bank-sold annuities during the first quarter of 2001, edging out Hartford Financial Services. The Houston-based company had total sales of almost $1.2 billion in the quarter, compared to Hartfords $887 million, data released by the research firm, Kenneth Kehrer Associates, shows.
American Generals total sales rose 26% from the last quarter of 2000, the firm reports. During the same period, Hartfords total annuity sales in banks fell by 3%.
Hartford maintained its lead in variable annuities, actually increasing sales slightly over the fourth quarter of 2000, to $841 million, from $834 million.
All in all, however, fixed annuities were the story in first quarter 2001.
Investor sentiment swung to fixed-rate products due to the stock market downturn, says Kenneth Kehrer, president of the firm that conducted the study. This allowed Houston-based American General, which emphasizes fixed products, to make a strong bid for more market share. It climbed from $771 million in sales of fixed annuities in the fourth quarter of 2000 to over $1 billion in the first quarter of this year, a 33% rise.
In contrast, it sold $407 million in VAs in the quarter, well below Hartfords $841 million and a 25% drop from the $516 million American General tallied in the prior quarter.
The insurer pursued a successful strategy of joint venturing with banks, says Kehrer, in which it has allowed banks to manage customer assets in its annuity products.
“No one else does that,” explains Kehrer. “Usually, its the insurance company backing the annuity that manages the assets in the account.”
The insurer also has pursued an aggressive marketing strategy, Kehrer notes.
“Theyve been in overdrive for the past three years, getting closer and closer to first place,” he says.
