U.S. banks increased sales of equity indexed annuities by 79% in the first quarter, well above the growth rate for EIAs sold through other channels.[@@]
Banks sold $300 million worth of EIAs in the quarter, compared to $168 million in the first quarter of 2004, according to survey results collected by Kenneth Kehrer Associates, Princeton, N.J.
Alan Blank, president of Midwood Financial Services Inc., Encino, Calif., the company that sponsored the survey, says recent data from LIMRA International, Windsor, Conn., show U.S. EIA sales totaled $6.4 billion in the first quarter, up 56% from year-earlier levels.
EIAs accounted for 5.4% of all fixed annuity sales in banks during the quarter, up from 4.9% a year earlier, the Kehrer study finds.
EIAs are fixed annuities that combine a minimum guaranteed interest rate with a rate linked to the performance of the stock market. Because of the guarantee, they give investors a way to gain from a rising market without facing a significant risk of losing their principal if the market goes down.