Bank-Sold Annuities Reach Two Year High
May 19, 2011 by N/A
Windsor, CT, May 17th, 2011 – Total annuity sales through banks topped $4 billion, reaching the highest level since March of 2009. According to the Kehrer-LIMRA Monthly Bank Annuity Sales Survey, both fixed and variable annuities registered double-digit growth for the second month in a row.
Financial institutions sold 31 percent more annuities in March than they did in February, which was 26 percent above January’s level of production. Combined fixed and variable sales in March were 27 percent higher than the $3.3 billion sold in the same month of the previous year.
“February was a banner month and we had been anticipating an additional boost in March.” said Janet Cappelletti, Associate Research Director at Kehrer-LIMRA. “Annuity sales have been relatively stagnant for the last year and we finally got the lift everyone was hoping for.”
Variable Annuity Sales
Variable annuities soared to a three-year peak in March, with sales reaching $2 billion in the bank channel. Sales increased 29 percent month-to-month and 36 percent above the prior March. Variable annuity sales lagged behind fixed sales for the third consecutive month.
Fixed Annuity Sales
Fixed annuity sales at banks jumped 32 percent to $2.2 billion. Fixed sales for March were also 21 percent higher than March of 2010. Monthly sales of fixed annuities in financial institutions have not been over $2 billion since October of 2009 when we reported $2.5 billion in sales.
Sales of fixed annuities continue to grow at banks even as the average effective yield remained level and CD rates rose. The spread between the yield on five-year CDs and the average effective yield offered by fixed annuities guaranteed for five years reached a 19 month high in mid-February of 43 basis points but by March the spread had slipped to 33 basis points.
Mutual Fund Sales
Mutual fund sales grew 4 percent from February to March. Banks sold $4.7 billion of mutual funds, 14 percent less than the previous March. Strong annuity sales squeezed mutual fund’s share of the sales mix down to 53 percent of packaged product sales, its lowest level since July of 2009.
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Kehrer-LIMRA is the premier provider of research and consulting services on banks as financial services stores. The Kehrer-LIMRA Monthly Bank Annuity Sales Survey is based on a national sample of banks that have a minimum of $4 billion in assets. The participating institutions account for about one-third of all bank annuity sales.
Contact:
Scott Stathis, Managing Director
scott.stathis@kehrerlimra.com
978.448.0198
300 Day Hill Road
Windsor, CT 06095
