Banks’ annuity fee income rose 10% in the second quarter, but that income is nevertheless down 7.8% for the first half of the year because first-quarter annuity sales were so weak, according to a report released Thursday.
Income earned, or commissions, from the sale of annuities at bank holding companies rose to $640.9 million, up 10.0% from $582.6 million in first-quarter 2010, according to the Michael White-American Bankers Insurance Association bank annuity fee income report.
This year’s second-quarter commissions were 8.0% higher than the $593.1 million earned in the second quarter of 2009. However, first-half 2010 annuity commissions of $1.22 billion were down 7.8% from the $1.33 billion in fee income earned in first-half 2009.
“Bank annuity revenues were really bad in the first quarter of this year. They were way down, and that is holding back first-half results. The big picture story is that there is some decent improvement in the sales of annuities, but there’s still a ways to go,” said Michael White, president of bank insurance consulting firm Michael White Associates, headquartered in Radnor, Pa., in a phone interview.
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Of 930 bank holding companies (BHCs), 387, or 41.6%, participated in annuity sales activities during first-half 2010. Their $1.22 billion in annuity commissions and fees constituted 10.8% of their total mutual fund and annuity income of $11.33 billion and 15.1% of total BHC insurance sales volume of $8.10 billion. The volume equals the sum of annuity and insurance brokerage income.