Bank Life Sales Soar

U.S. banks sold 32% more life insurance during the first 3 quarters of 2009 than they did during the comparable period in 2008, according to Kehrer-LIMRA.

Kehrer-LIMRA, Windsor, Conn., has published percentage change figures, not figures on the total volume of life insurance products sold. Bank life sales account for just a portion of all U.S. life sales.

But the growth rate for life sales at banks far outpaced the life sales growth rate for the U.S. life insurance industry as a whole, Kehrer-LIMRA reports.

Total U.S. individual life sales fell 11% during the first 3 quarters of 2009.

During that same period, bank sales of variable life products were 40% lower than they were during the comparable period in 2008. But bank sales of all other life products were strong, and, during the third quarter, banks' life sales were up 59%.

Banks get about 90% of their life sales revenue from transactions involving lump-sum, single-premium payments, Kehrer-LIMRA says.

Because single-premium products are more transactional in nature, they are more in tune with the bank rep sales culture, Kehrer-LIMRA says.

Single-premium sales have been less affected by the volatility in the markets than variable products, so banks were cushioned from the overall downturn in the life insurance market, Kehrer-LIMRA says.

But 70% of banks say one of the challenges in growing life insurance sales is overcoming bank reps' transactional mindset, Kehrer-LIMRA reports.

"The recent go-to products for bank reps have become harder to sell in the current environment," said Scott Stathis, Kehrer-LIMRA's managing director. "Interest rates on fixed annuities are low, and variable annuities have become more expensive, while the benefits have been watered down…. Bank reps have become more receptive to adding life insurance to their sales mix."

Bank Life Sales Soar

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Bank Life Sales Soar

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