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Banks Report Slump In Annuity Sales

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Sales of annuities in banks and savings institutions fell 9% in October from year-earlier levels, a new study finds.[@@]

Banks’ total annuity sales fell to $3.8 billion in October, according to a monthly survey by Kenneth Kehrer Associates, Princeton, N.J. The survey is sponsored by Jackson National Life Insurance Company, Lansing, Mich.

Variable annuity sales continue to disappoint banks, according to Brad Powell, president of Jackson National’s institutional marketing group.

Bank VA sales slipped to $1.3 billion, down from $1.4 billion a year earlier.

Kenneth Kehrer, head of the research firm that conducted the study, notes that bank VA sales have not responded to the resurgence in the equity markets.

U.S. banks and savings institutions sold $2.5 billion in fixed annuities in October, down 12% from $2.8 billion a year earlier.

However, fixed annuities showed signs of a rebound as October sales jumped 15% from September’s total of $2.2 billion.

Kehrer says more banks now are selling fixed annuities with substantial first-year bonus interest rates. The first-year bonus rates make the annuities more competitive with bank certificates of deposit.