Bank variable annuity premiums were up 34% in June 2002 over year-ago levels and increased 6% over May 2002, reports Kenneth Kehrer Associates, Princeton, N.J., in a survey sponsored by Jackson National Life Insurance Company, Lansing, Mich.
“All bank VA sales were up for the second consecutive month and the third time in the past four months,” says Brad Powell, president of Jackson Nationals institutional marketing group.
Sales of fixed annuities, however, fell in June by 8% from record levels set the month before. Because fixed products account for 73% of all annuity sales in banks, total annuity sales were off by 4.7% from May, falling from about $4.8 billion to $4.5 billion.
Banks continuing improvement in VA sales came despite falling mutual fund sales. Fund sales in banks were off 22% in June from the month before, Kehrer found.
One reason for the resurgence in VAs was that many of the new products sold through banks have features that limit investors potential losses in a pool of securities that are similar to mutual funds. A few major carriers changed VA design to give consumers a choice of features and to pay only for the enhancements they want, observes Powell.