Bank sales of annuities climbed to $3.2 billion in February, up 7% from the total for February 2005.[@@[
Although fixed annuity sales fell 18%, to $1.5 billion, variable annuity sales increased 42%, to $1.8 billion, according to a survey by Kenneth Kehrer Associates, Princeton, N.J.
The survey is sponsored by Jackson National Life Insurance Company, Lansing Mich., a unit of Prudential P.L.C., London.
Low interest rates have narrowed fixed annuities advantage over bank certificates of deposit over the past year, says Greg Salsbury, chief sales officer at Jackson National’s institutional market group.
“Some banks have been able to offset declining sales of traditional declared rate fixed annuities by offering their customers fixed indexed annuities,” Salsbury says. “But not enough banks have started offering this product yet to fully compensate for the industrywide decline in traditional fixed annuity sales.”
In February, banks sold $1.20 in VAs for every dollar of fixed annuity premium, compared to $0.75 per $1 a year earlier, the Kehrer firm reports.