Bank annuity sales in May totaled $4.1 billion, up from $4 billion in May 2006, according to a study by Kehrer-LIMRA.
Although sales of fixed annuities in banks fell to $1.7 billion for the month, from $1.9 billion a year earlier, banks’ variable annuity sales rose from $2.1 billion to $2.4 billion in the same period, according to Kehrer-LIMRA, a division of LIMRA International, Windsor, Conn.
The monthly survey is based on a national sample of banks that each have a minimum of $4 billion in assets.
“After hitting a low of $1 billion in February 2007, bank sales of fixed annuities have rebounded, rising 70% through May,” noted Kenneth Kehrer, who conducts the survey.
Meanwhile, banks’ VA sales rose 33% since January, when such sales hit $1.8 billion.
Kehrer notes that the average base new money rate on fixed annuities guaranteed for 1 year remained below the average yield on 1-year CDs in May, marking the ninth month in a row that the average base rate on fixed annuities was below the CD rate.
In May, banks sold $1.41 in VAs for every $1 of fixed annuities, compared to $1.11 in VAs for every $1 of fixed annuities they sold a year earlier.