Skip to content

Windsor, CT, July 23, 2007 — In April, total bank annuity sales fell 3 percent compared to the prior month. According to the Kehrer-JacksonSM Monthly Bank Annuity Sales Survey, financial institutions sold $3.5 billion of fixed and variable annuities in April, down from $3.6 billion in March, but higher than the $2.9 billion sold in January and February. The monthly survey is based on a national sample of banks that each have a minimum of $4 billion in assets.

Greg Cicotte, executive vice president and national sales manager for Jackson National Life Distributors LLC, which includes the company's Institutional Marketing Group, the sponsor of the monthly survey, said that although April's total bank annuity sales declined compared to the prior month, they were still 21 percent higher than the total generated in January 2007, and 9 percent higher than total sales in April 2006.

Dr. Kenneth Kehrer, whose firm, Kehrer-LIMRA, conducts the monthly survey, said that after a 50-percent increase in March, fixed annuity sales leveled off in April.

"Fixed annuity sales in financial institutions were 36 percent higher in April than in January," Kehrer said. "However, despite this increase, we observed a general trend of declining fixed annuity sales from September 2006 through February 2007. Fixed annuity sales in April 2007 were level with sales in April 2006."

Cicotte added that sales of variable annuities in banks slipped 5 percent in April, following gains in both February and March. "Variable annuity sales increased 11 percent in April compared to January's VA sales, and were also 18 percent higher than April 2006," Cicotte said. "Additionally, variable annuities have outsold fixed annuities in financial institutions in nine of the last 12 months."

According to the Kehrer-LIMRA Bank Fixed Annuity RateWatch, the difference between the average fixed annuity bonus rate and the average rate on a one-year CD decreased in mid-April to 1.62 percent from 1.65 percent in mid-March and 1.69 percent in mid-February. Kehrer explained that fixed annuities tend to be more attractive than one-year CDs when the fixed annuity rate, including any bonus, is at least 2 percent higher than the rate offered on a one-year CD.

"While the interest rate environment deteriorated in April, it's worth noting that fixed annuity sales held steady from March to April," Cicotte explained. "The result is likely due to the large number of certificates of deposit that typically mature in April, as well as the spring tax season, when investors are more likely to seek the security of fixed rate, tax-advantaged products."

Banks sold $1.33 in variable annuities for every dollar of fixed annuities in April 2007, compared to $1.40 in March, and $1.90 in February. In April 2006, this ratio was $1.13 in variable annuities for every dollar of fixed annuities.

The Kehrer-Jackson Monthly Bank Annuity Sales Survey monitors annuity sales from a national sample of banks, S&Ls and credit unions. The survey is conducted by Kehrer-LIMRA and sponsored by Jackson's Institutional Marketing Group.

Kehrer-LIMRA is the successor company to Kenneth Kehrer Associates, the premier provider of research and consulting services on banks as financial services stores.

About LIMRA International

LIMRA International is a worldwide research, consulting and professional development organization that helps more than 850 insurance and financial services companies in 73 countries increase their marketing and distribution effectiveness. Visit LIMRA International at www.limra.com.

Media Contacts

Catherine Theroux

Director, Public Relations

Work Phone: (860) 285-7787

Mobile Phone: (703) 447-3257

ctheroux@limra.com

Brooke Lacey

Public Relations Specialist

Work Phone: (860) 298-3920

Mobile Phone: (413) 530-6184

blacey@limra.com