BISRA announced that annuity sales in banks fell 10 percent in the first quarter of 2015, and a decline in the sales of fixed annuities was a major factor.
“Sales of variable annuities in the bank channel grew 5 percent, but the increase was not enough to compensate for the bank channel’s drop in fixed annuity sales,” said Dr. Betty Moon, managing director, Bank Insurance and Securities Research Associates (BISRA), a collaborative effort between the Bank Insurance and Securities Association (BISA) and LIMRA.
Fixed annuity sales were down 22 percent in banks in the first quarter, compared with prior year’s first quarter; yet sales levels remained steady with results from the fourth quarter of 2014. For the insurance sales industry as a whole, sales of fixed annuities dropped 10 percent in the first quarter, matching the experience of the banking industry’s programs. BISRA has found that sales of fixed annuities are especially susceptible to specific market conditions.
“The interest rate environment continues to be challenging, and fixed annuity production continues to be highly sensitive to such an environment,” said Dr. Moon. “That said, the decline experienced over the past four consecutive quarters seems to have subsided in the first three months of 2015.”