Bank sales of annuities climbed to $3.3 billion in November 2006, up from $3.1 billion a year earlier.
Bank variable annuity sales increased 11% from the total for November 2005, to $1.8 billion, while bank sales of fixed annuities held steady at $1.5 billion, according to Kehrer-LIMRA, a unit of LIMRA International Windsor, Conn.
Researchers at Kehrer-LIMRA published the results in the Kehrer-Jackson Monthly Bank Annuity Sales Survey report, which is sponsored by Jackson National Life Insurance Company, Lansing, Mich., a unit of Prudential P.L.C., London.
Banks reported $1.20 in VA sales for every dollar in FA sales, up from a ratio of $1.07 in VA sales per $1 of FA sales in November 2005, according to Kehrer-LIMRA.
Variable annuities have outsold fixed annuities in banks during 9 out of the past 12 months, says Kenneth Kehrer, the head of Kehrer-LIMRA.
One reason for lackluster fixed annuity sales appears to be that average new money rates on fixed annuities guaranteed for 1 year were below the average 1-year CD yield in November.
“This marks the third month in a row that the average base rate on fixed annuities guaranteed for 1 year has been below the 1-year CD rate,” Kehrer says.
The difference between the average fixed annuity bonus rate and the average rate on a 1-year CD was 1.5% in mid-November, Kehrer says.