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A top executive at American International Group says U.S. annuity sales seem to be firming up.

Kevin Hogan, the chief executive officer of AIG’s Life & Retirement unit, talked about the sales pipeline Tuesday, during a conference call the company held to go over its latest earnings.

(Related: AIG’s Life and Retirement Business Made $650 Million: Earnings)

Hogan told the analysts that, because of the effects of COVID-19 and the pandemic-related social distancing rules, “the quarter was the lowest in memory.”

But, “towards the latter part of June, we saw some real signs of life,” Hogan said.

The bank channel suffered the most serious disruption: AIG annuity sales through that channel fell about 60%.

But sales through the bank channel in July were almost twice as high as sales in June, Hogan said.

At financial advisors, broker-dealers and insurance marketing organizations, sales fell about 40%, Hogan said.

AIG responded to falling interest rates by repricing its products quickly. Now, other issuers have caught up with repricing, and that may be starting to level the playing field, Hogan said.

Many advisors have now shifted to virtual sales practices, Hogan added.

Thanks to the marketwide pricing realignment, and the sales system shift, sales through advisors, broker-dealers and IMOs also looked much stronger in July than in June, Hogan said.

“The pipeline is growing,” Hogan said. “Our sales of annuities per day continued to increase. So, we’re pretty optimistic that, if conditions continue the way they are, we’ll see recovery in July over June, and in the third quarter over the second.”

Meanwhile, Hogan said, sales of life insurance increased 4%, in spite of all of the disruption.

“Our direct channel is performing particularly well,” Hogan said.

At the institutional level, sales of group annuities to employers that want to transfer pension risk have been strong, and the sales pipeline for life reinsurance deals also looks good, Hogan said.

“We feel cautiously optimistic that the second quarter will be the low water mark, and that our strategy will prevail in the third quarter and beyond,’ Hogan said.

In remarks about the effects of COVID-19 on claims, Hogan said that the overall net effect of the pandemic on AIG’s results is just modestly higher than the kinds of mortality levels already built into pricing assumptions.

About 40% of the death claims appear to reflect an acceleration of claims for insureds who were likely to have died within the next five years, even if the COVID-19 outbreak had not happened, Hogan said.

Hogan’s remarks about advisor channel strength appear to resemble what other carriers are reporting

At Prudential Financial, for example, U.S. individual annuity sales through insurance agents fell just 32% between the second quarter of 2019 and the latest quarter, to $496 million.

Prudential’s annuity sales through wirehouses, independent financial planners and banks fell more than 50%.

— Read Life, Health and Annuity Issuer Earnings Season Beginson ThinkAdvisor.

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