EVANSTON, Ill., Aug. 22, 2008 (GLOBE NEWSWIRE) -- Insurance companies participating in the Beacon Research Fixed Annuity Premium Study again reported strong fixed annuity sales through U.S. banks in second quarter, 2008(1). The quarter's sales of $7 billion were 81.1% above second quarter, 2007 and 25.8% ahead of the previous quarter. Reported year-to-date sales of $12.6 billion were up 79.9% from first half, 2007(2).
Book value annuities(3) continued to dominate with sales of $6 billion - up 86.0% from second quarter, 2007 and 19.1% quarter-to-quarter. But participants' sales of the other product types also grew in double-digit percentages relative to both periods. Their sales of market value-adjusted (MVA) annuities were $552 million, indexed - $323 million, and immediate - $156 million.
AIG Annuity led in the bank channel for the seventh straight quarter. Second quarter results for the top ten Study participants were as follows:
Bank Channel Sales
(in thousands)
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AIG Annuity Insurance Co. (NYSE:AIG) 1,968,152
New York Life 1,352,805
AEGON/Transamerica (NYSE:AEG) 1,170,144
Allstate Financial (NYSE:ALL) 569,925
Jackson National Life 387,450
Genworth Financial Companies 274,438
W&S Financial Group Distributors 243,926
Lincoln Financial Group (NYSE:LNC) 235,379
Protective Life (NYSE:PL) 196,302
Hartford Life (NYSE:HIG) 151,906
Sun Life Financial (NYSE:SLF) 104,344
Lincoln Financial Group's New Directions was the only indexed annuity among second quarter's top ten bank channel products (NYSE:LNC). Predictably, all the rest were book value annuities. Second quarter results include sales of some 126 products sold in financial institutions(4).
Rank Company Name Product Name Product Type
1 New York Life NYL Enhanced Fixed Book Value
Annuity
2 AIG Annuity Proprietary Bank Book Value
Product C
3 New York Life NYL Preferred Fixed Book Value
Annuity
4 AEGON/ Transamerica Capital Book Value
Transamerica Builder 2007
5 AIG Annuity Flex 5 Book Value
6 Allstate Allstate Preferred Book Value
Financial Performance
7 AIG Annuity Flex 7 Book Value
8 Western-Southern MultiRate Annuity Book Value
Life
9 Lincoln Financial New Directions Indexed
Group
10 AEGON/ Proprietary Bank Book Value
Transamerica Product 7
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(1) This category includes credit unions and savings and loan
institutions.
(2) Sales figures do not include structured settlements.
(3) Book value fixed annuities pay a declared rate of interest for
a specified period. A market value adjustment (MVA) is not
imposed if the holder withdraws assets before the end of the
contract term. MVA products also pay a declared rate of
interest for a specified period, and do impose such an
adjustment.
(4) This total excludes immediate annuities.
"Though the spread between one- and ten-year Treasuries narrowed over the quarter, the yield curve remained positive. This gave fixed rate annuities a continued advantage over bank certificates of deposit. In addition, fixed annuity rates were higher in second quarter," said Jeremy Alexander, CEO of Beacon Research. "Larger indexed annuity cap rates and immediate annuity payouts helped increase bank sales of these products as well. We expect growth to continue in third quarter, but at a slower rate."
About the Beacon Research Fixed Annuity Premium Study
The quarterly Study is the first and only source to track and analyze product-level fixed annuity sales on an ongoing basis. Providing timely market intelligence of the highest quality, it's designed to report what's moving in each channel and why. The extent of Study participation is testimony to the need for this information.
About Beacon Research
Beacon Research is an independent research organization founded in 1997. It compiles market intelligence on fixed annuity products for subscribers to its web-based systems at www.annuitynexus.com. Carriers access these systems to support product development, rate setting and competition research. Distributors use them for product analysis and selection. The AnnuityNexus Sales Support System is an important resource for retention teams and sales desk staff throughout the distribution chain. Beacon also licenses information and software tools to other platforms, including websites for sales representatives and EbixExchange's AnnuityNet annuity automation platform. Beacon's fixed annuity benchmark series -- the industry's first - is available through Ibbotson Associates. Directly and through strategic alliances, Beacon information can be accessed by hundreds of financial institutions and distributors.
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