NU Online News Service, March 28, 2003, 4:43 p.m. EST – U.S. banks generated $3.6 billion in annuity sales in January, down 5% from annuity sales for January 2002, according to a new study by Kenneth Kehrer Associates, Princeton, N.J.
Annuity sales continued to fall despite an increase in variable annuity sales, the market research firm says.
Although bank sales of variable annuities increased to $1.1 billion, from $800 million in January 2002, bank sales of fixed annuities fell to $2.5 billion, from $3 billion.
Banks sold $2.27 in fixed annuities in January for every dollar generated through variable annuity sales. The fixed-to-variable sales ratio has fallen from a level more than 4 to 1 in January 2002.
The survey is sponsored by Jackson National Life Insurance Company, Lansing, Mich., a unit of Prudential P.L.C., London.
The shift toward variable annuities is due largely to low rates on fixed annuities, says Kenneth Kehrer, the head of the firm that conducted the study.