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Bank Annuity Sales Ride A Rollercoaster

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NU Online News Service, Feb. 6, 2004, 5:15 p.m. EST – Bank annuity sales were both up and down in December 2003.[@@]

Combined bank sales for fixed and variable annuities amounted to $3.5 billion. That figure is 6% higher than the November 2003 sales total, but it’s 8% lower than the December 2002 total, according to the Kehrer-Jackson National Monthly Bank Annuity Sales Survey.

Survey figures show that bank annuity sales were on a rollercoaster throughout the last 4 months of 2003.

The banks did great in September and miserably in November. December was somewhat better than November.

But “December’s sales were the second lowest monthly total during 2003,” observes Brad Powell, president of the institutional marketing group at Jackson National Life Insurance Company, Lansing, Mich., which sponsors the monthly survey.

Overall, however, Powell expresses satisfaction with banks’ 2003 annuity results. He notes that VA sales increased in December for the first time in 8 months. VA sales rose to $1.3 billion in December. Sales were 11% higher than in November and 30% higher than in December 2002.

Sales of fixed annuities amounted to $2.2 billion. FA sales were up 5% from the previous month but down 21% from the comparable month in 2002.

Kenneth Kehrer, whose Princeton, N.J., research firm conducts the monthly survey, says banks’ FA sales have suffered from the narrow spreads between the rates currently available from carriers and the rates offered on bank certificates of deposit.