The total amount of life premiums collected by banks was 41% higher in the third quarter than in the third quarter of 2009, but October sales of annuities through banks were 29% lower than in October 2009.
Kehrer-LIMRA, Windsor, Conn., has reported those results in two separate survey reports.
U.S. bank life sales have been strong all year, but results could be weaker this quarter, according to Scott Stathis, a Kehrer-LIMRA managing director.
A few life carriers recently dropped out of the bank channel because it accounted for only a small piece of their overall sales, Stathis says.
Bank sales of single-premium policies accounted for about 95% of the bank life sales, Kehrer-LIMRA says.
“By making the single-premium sale more transactional in nature, the carriers have more effectively accommodated the bank culture,” Stathis says. “In addition, the low-interest-rate environment that has stifled annuity sales has benefitted life sales, since it is an alternative investment that is not rate sensitive.”
During the first 3 quarters of the year, about 25% of U.S. single-premium life sales were made through banks, Kehrer-LIMRA says.
In the annuity sales update, Kehrer-LIMRA is reporting that financial institution annuity sales fell to $2.5 billion in October, down from $3.5 billion in October 2009.
Fixed annuity sales dropped to $1.1 billion, from $2.5 billion, but variable annuity sales rose 30%, to $1.4 billion.
Fixed annuity sales suffered in banks because the difference between the yield on 5-year certificates of deposit and the average effective yield offered by fixed annuities guaranteed for 5 years has disappeared, Kehrer-LIMRA says.
Banks sold $1.21 in variable annuities for every $1 of fixed annuities in October, Kehrer-LIMRA notes.
In October 2009 the ratio was $2.31 of fixed sales for every $1 of VA sales.