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Banks Report Annuity Flat Sales

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NU Online News Service, Jan. 28, 2005, 4:28 p.m. EST

Annuity sales in banks and savings institutions were about the same in November 2004 as they were in November 2003.[@@]

Volume remained flat at $3.6 billion, according to a monthly survey conducted by Kenneth Kehrer Associates, Princeton, N.J. The survey is sponsored by Jackson National Life Insurance Company, Lansing, Mich.

Although volume held steady, sales of variable annuities rose, to $1.4 billion, from $1.3 billion, while sales of fixed annuities fell, to $2.2 billion, from $2.3 billion.

Total annuity sales in banks in November slipped back to September’s level, which was the worst sales month since January 2004, according to Brad Powell, president of Jackson National’s institutional marketing group.

“Despite some months when sales increased somewhat, total annuity sales have generally declined since then,” Powell says.

Kenneth Kehrer, head of the firm that conducts the survey, notes that bank sales of variable annuities peaked at $1.8 billion in March and generally have fallen since then.

“Of greater concern is whether negative media coverage and regulatory scrutiny are discouraging financial advisors and their clients from considering variable annuities,” Kehrer says. “We have seen a rebound in bank mutual fund sales recently, but VA sales have not followed suit.”