BISA Reports Big Drop In Bank Fixed Annuity Sales

During the fourth quarter, bank customers continued to retreat from fixed annuities, but variable annuities had trouble capturing the assets flowing out of fixed annuities.

The share of bank investment revenue coming from variable annuities crept up to 18%, from 17%, but the share coming from fixed annuities fell to 34%, from 47%, BISA says. The share coming from VA sales was down from 21% in both the second and the third quarters of 2003.

In terms of retail bank deposits, FA sales rose to $773 per $1 million in bank deposits, up from $761 per $1 million in deposits in the fourth quarter of 2002, but VA sales shrank to $415 per $1 million in retail deposits, from $483.

The softness in VA sales was due largely to a shift toward investments in stocks and bonds, BISA figures show.

Life insurance sales accounted for 2.9% of bank brokers' revenue in the quarter, down from 3.1% in the third quarter, but life insurance revenue penetration increased to $92 per $1 million in bank retail deposits, up from $38 per $1 million in retail deposits.