In September, for the first time in 5 years, bank and savings institution sales of variable annuities exceeded sales of fixed annuities.[@@]
Bank sales of variable annuities reached $1.9 billion in September, up from $1.4 billion in September 2004, while bank FA sales fell to $1.6 billion, from $2.2 billion, according to Kenneth Kehrer Associates, Princeton, N.J.
The last time bank VA sales were higher than bank FA sales was in the third quarter of 2000.
But total bank sales of fixed and variable annuities fell to $3.5 billion, down from $3.6 billion in September 2004, Kehrer says.
Low interest rates continued to hurt fixed annuity sales in banks, says Brad Powell, president of the institutional marketing group at Jackson National Life Insurance Company, Lansing, Mich., the organization that sponsors the survey.
The average difference between fixed annuity interest rates and rates paid by bank certificates of deposit fell to only 1.84% in September, compared to a spread of a little more than 2% in mid-August.
A spread of less than 2% tends to depress fixed annuity sales in banks, according to Kenneth Kehrer, owner of Kenneth Kehrer Associates.