Sales of variable annuities in banks and thrifts seem to have halted their long decline, while bank sales of annuities in general reached new highs, finds a survey of 32 insurers by Kenneth Kehrer Associates, Princeton, N.J.
During the first three months of 2002, total annuity sales through banks and thrifts rose 2% over the final quarter of 2001, to $11.4 billion, according to the Kehrer Report. It was the fourth straight quarter banks have set a new annuity sales record.
After declining for six straight quarters, VA sales in banks were up, though they still lagged other channels. Banks sold $2.5 billion of VAs during the quarter, 4% more than the $2.4 billion sold the previous quarter. Still, bank sales of VAs were 40% below the high of $4.2 billion set seven quarters previously, the Kehrer firm found.
“Banks sold $8.9 billion of fixed annuities, up just 1% from the previous quarter,” says Kenneth Kehrer, head of the firm. “But bank fixed annuity sales have increased every quarter since the third quarter of 2000 and set a new quarterly record every quarter since the first quarter of 2001. Banks sold $3.18 in fixed annuities for every dollar of VA during the quarter, somewhat less than the $3.67-to-$1 advantage in the fourth quarter.”