Bank sales of annuities fell to $3.6 billion in September, down 18% from the total for September 2003.[@@]
Kenneth Kehrer Associates, Princeton, N.J., has published those figures in its latest Kehrer-Jackson National Monthly Bank Annuity Sales Survey report.
The September sales total was also down 10% from the August total.
Despite the slump, the good news is that the long decline in variable annuity sales in banks showed signs of ending, according to Brad Powell, president of the institutional marketing group at Jackson National Life Insurance Company, Lansing, Mich., the company that sponsors the survey.
September VA sales fell from $1.5 billion in September 2003 but were about even with the results for the preceding month, Powell says.
Fixed annuity sales in banks continued to plunge.
U.S. banks and savings institutions sold $2.2 billion in fixed annuities in September, down 26% from $2.9 billion a year ago, says Kenneth Kehrer, whose firm conducts the study.
Powell believes that low interest rates finally caught up with bank FA sales in September.
He points out that the average crediting rate on new money invested in fixed annuities guaranteed for 1 year dropped to 3.07% in mid-September from 3.18% in mid-July.
If Powell’s reasoning is correct, the slump in FA sales might have continued into October: FA rates sank to 2.79% in mid-October, Powell says.