Bank annuity sales at low point
By National Underwriter
By Michael K. Stanley
In 2012, bank-sold annuities hit their lowest point since 1999 with total annuity sales through banks totaling $29.6 billion.
The findings, included in a report from Bank Insurance & Securities Research Associates (BISRA) found that annuity production at banks steadily rose from the previous low of $31 billion in 2000 every year until 2012.
Annuity sales at banks dropped 20 percent year-to-year in 2012, a dramatic fall from their apex of $54 billion in 2008.
The report attributes the overall decline in annuity sales through banks to fixed annuity sales. While fixed annuities showed promise to be sold through the bank channel in 2011, fixed annuity production at banks was down by one-third when compared with 2011.
The average five-year fixed annuity yield still performed better than the average five-year CD rates which allowed some carriers to successfully pitch the product. Western National, for example recorded the highest sales of fixed annuities through banks for the 17th consecutive year.
Variable annuities, which are not as subject to rate spread volatility when compared with CDs, outsold fixed annuities nearly one-and-a-half to one, although they slipped 10 percent from 2011 to 2012, generating $17.7 billion.
Prudential maintained 20 percent of the variable annuity market through banks for the second consecutive year.
Originally published on LifeHealthPro.com