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Report: annuity fee income in 2012 surpasses 2011 total

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Income earned from the sale of annuities at bank holding companies in the first half of 2012 hit $1.58 billion, up 3.4% over $1.53 billion earned in first half 2011, new research reveals.

The “Michael White-ABIA Bank Annuity Fee Income Report” indicates, however, that annuity income would have been down were it not for the contributions of new reporters in the form of thrift holding companies (THCs) and new bank holding company (BHC) Raymond James Financial, Inc. Second-quarter 2012 annuity commissions rose to $799.9 million, up 2.4% from $781.4 million earned in second quarter 2011 and up 2.3% from $781.7 million in first quarter 2012.

Compiled by Michael White Associates and sponsored by American Bankers Insurance Association (ABIA), the report measures and benchmarks the banking industry’s performance in generating annuity fee income. The report is based on data from all 7,246 commercial banks, savings banks and savings associations (thrifts), and 1,070 large top-tier bank and savings and loan holding companies (collectively, BHCs) operating on June 30, 2012.

Thrifts and savings and loan holding companies began reporting insurance fee income for the first time in first quarter 2012. Several BHCs that are historically and traditionally insurance companies have been excluded from the report.

Of the 1,070 BHCs, 426 or 39.8% participated in annuity sales activities during first half 2012. Their $1.58 billion in annuity commissions and fees constituted 14.0% of their total mutual fund and annuity income of $11.33 billion and 28.9% of total BHC insurance sales volume (i.e., the sum of annuity and insurance brokerage income) of $5.47 billion, the report states.

Of the 7,246 banks, 942 or 13.0% participated in first-half annuity sales activities. Those participating banks earned $367.4 million in annuity commissions or 23.2% of the banking industry’s total annuity fee income; their annuity income production was down 8.4% from $401.1 million in first half 2011.


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