By Warren S. Hersch
Income earned from the sale of annuities
at bank holding companies climbed 22.6 percent during the first three quarters of 2011, according to a new report.
The American Bankers Insurance Association, Washington published this finding in a Michael White-ABIA Bank Annuity Fee Income Report compiled by Michael White Associates LLC, Radnor, Pa. The report measures and benchmarks the banking industry's performance in generating annuity commissions and fees.
Results are based on data from all 6,740 commercial and FDIC-supervised savings banks and 927 large top-tier bank holding companies operating on September 30, 2011.
The report reveals that annuity income earned from the sale of annuities at bank holding companies reached $2.26 billion in the first three quarters of 2011, up from $1.84 billion in the first three quarters of 2010.
Third-quarter BHC annuity commissions slowed in comparison to those of the first two quarters, the report adds. They were $731.5 million, down 6.4 percent from a record-setting $781.4 million in second quarter 2011, but still up 17.7 percent from $621.3 million earned in third quarter 2010.
Thus far in 2011, 41.8 percent of large top-tier BHCs
engaged in annuity sales.
Of the 927 BHCs surveyed, 387 or 41.8 percent participated in annuity sales activities during the first three quarters of 2011. Their $2.26 billion in annuity commissions and fees constituted 12 percent of their total mutual fund and annuity income of $18.91 billion and 16 percent of total BHC insurance sales volume (i.e., the sum of annuity and insurance brokerage income) of $14.2 billion.
Of the 6,740 banks, 901 or 13.4 percent participated in annuity sales
activities, earning $588.9 million in annuity commissions or 26.0 percent of the banking industry's total annuity fee income. Bank annuity production was up 5 percent percent from $560.9 million in the first three quarters of 2010.
Three-quarters (75.3 percent) of BHCs with over $10 billion in assets earned third quarter year-to-date annuity commissions of $2.15 billion, constituting 95 percent of total annuity commissions reported. This was an increase of 23.7 percent from $1.74 billion in annuity fee income in the first three quarters of 2010.
Among this asset class of largest BHCs in the first three quarters, annuity commissions made up 11.5 percent of their total mutual fund and annuity income of $18.60 billion and 15.9 percent of their total insurance sales volume of $13.51 billion. Wells Fargo & Company (CA), Morgan Stanley (NY), JPMorgan Chase & Co. (NY), Bank of America Corporation (NC), and Regions Financial Corp. (AL) led all bank holding companies in annuity commission income in the first three quarters of 2011.
Originally published on LifeHealthPro.com