NU Online News Service, June 17, 4:55 p.m. – Bank sales of fixed annuity increased to $3.3 billion in April, up 76% from April 2001, according to a survey by Kenneth Kehrer Associates, Princeton, N.J.
Jackson National, a unit of Prudential P.L.C., London, sponsored the survey.
Bank sales of variable annuities amounted to $1 billion, up only 5% from April 2001. But even that modest increase indicates a recovery from a severe sales slump that lasted from April 2001 to February 2002, researchers say.
In April, the researchers report, banks generated $3.25 in fixed annuity sales premiums for every dollar they generated from selling variable annuities.
Fixed annuities sold so well because the average base crediting rate was 4.7% in April, 2.44 percentage points greater than the interest rate paid on the average bank certificate of deposit, according to Kehrer Associates.
Fixed annuities that offered a first-year bonus paid 3.5 percentage points more on average than one-year CDs, Kehrer adds.