Not only did income from the sale of annuities at bank holding companies (BHCs) increase 9 percent last year, but bank annuity fee income set record revenues each quarter.
Income from the sale of annuities at BHCs went from $3.15 billion in 2012 to a record $3.43 billion in 2013, according to the Michael White Bank Annuity Fee Income Report. Fourth-quarter 2013 BHC annuity commissions reached a record $932.0 million, up 6.5 percent from $875.0 million in the record third quarter. They increased 17.3 percent from $794.8 million earned in fourth quarter 2012.
"There were signs of a definite improvement in BHC annuity earnings momentum," said Michael White, president of MWA and author of the report. "Of 423 large top-tier BHCs reporting annuity fee income in 2013, 216 or 51.1 percent (up from 179 or 41.8 percent) earned a minimum of $250,000 selling annuities. Of those 216, 127 BHCs (58.8 percent) achieved double-digit growth in annuity fee income. That was a 24-point rise from 2012, when 62 BHCs (34.6 percent) that earned at least $250,000 in annuity income achieved double-digit growth in annuity fee income."
Sixty-seven percent of BHCs with more than $10 billion in assets earned annuity commissions of $3.20 billion, constituting 93.1 percent of total annuity commissions reported – an increase of 7.7 percent from $2.97 billion in annuity fee income in 2012. Among this asset class of largest BHCs, annuity commissions made up 37.9 percent of their total insurance sales volume of $8.44 billion, the highest proportion of annuity income to insurance sales revenue of any asset class.
BHCs with assets between $1 billion and $10 billion recorded an increase of 32.4 percent in annuity fee income in 2013, rising from $156.4 million in 2012 to $207.1 million and accounting for 22.2 percent of their total insurance sales volume of $932.4 million.
