Fixed annuity sales by banks and other depository institutions generated $4.93 billion in this year’s first quarter, a 16% percent increase over the same period a year ago, according to data released by the American Bankers Insurance Association. Quarter-to-quarter sales grew 56%. The sales estimates are based on findings from the Beacon Research Fixed Annuity Premium Study.
“Though low by historical standards, fixed annuity rates were higher than in fourth quarter 2010,” said Jeremy Alexander, president and CEO of Beacon Research. “Decisions by many carriers and banks to increase fixed annuity sales undoubtedly played a role as well. In addition, risk aversion has increased, and that tends to favor sales of fixed annuities over variable annuities.”
A surge in sales of fixed rate annuities without market-value adjustments, or MVAs, drove overall results. MVAs increase or decrease the value of annuity withdrawals, depending on whether interest rates have fallen or risen since the annuity was purchased.
Improved sales were reported by more than one-third of the bank channel carriers tracked by Beacon’s study, with 69% reporting improved quarter-to-quarter sales. Western National Life maintained its position as the leading bank channel company among study participants.
First quarter 2011 bank channel results for the 10 leading companies were as follows:
|Western National Life (AIG)||2,103,924|
|New York Life||618,304|
|Great American Financial Resources||271,448|
|Lincoln FInancial Group||252,839|
|Jackson National Life||179,258|
|W&S Financial Group Distributors||177,536|
|Source: Beacon Research|
Western National’s Flex 7 moved up two places to become the quarter’s top bank channel fixed annuity. Protective Life’s ProSaver Secure II rejoined the top ten in tenth place. Lincoln Financial Group’s New Directions continued as the only top-ten indexed annuity, coming in fifth place.
The first quarter’s leading bank-sold annuities were as follows:
|Western National Life||Flex 7||Fixed Rate Non-MVA|
|Western National Life||Proprietary Bank Product A||Fixed Rate Non-MVA|
|New York Life||NYL Preferred Fixed Annuity||Fixed Rate Non-MVA|
|Western National Life||Flex 5||Fixed Rate Non-MVA|
|Lincoln Financial Group||Lincoln New Directions||Indexed|
|Western National Life||Proprietary Bank Product F||Fixed Rate Non-MVA|
|New York Life||NYL Secure Term Fixed Annuity||Fixed Rate Non-MVA|
|Western & Southern Life||MultiRate Annuity||Fixed Rate Non-MVA|
|Western National Life||Proprietary Bank Product B||Fixed Rate Non-MVA|
|Protective Life||ProSaver Secure II||Fixed Rate Non-MVA|
|Source: Beacon Research|