EVANSTON, Ill., May 30, 2008 (PRIME NEWSWIRE) -- Insurance companies participating in the Beacon Research Fixed Annuity Premium Study reported strong first quarter growth in fixed annuity sales through U.S. banks(1). Overall sales of $5.2 billion were 70.1% ahead of first quarter, 2007 and up 26.1% from the prior quarter(2).
Book value(3) sales of $4.6 billion accounted for most of this growth - 90.2% above first quarter, 2007 and up 29.6% quarter-on-quarter. Sales of market value-adjusted (MVA) annuities were $217.0 million, indexed - $204.8 million, and immediate - $125.8 million. These results reflect decreases from the prior quarter for immediate annuities and MVAs (both down less than 1%) and 9.3% growth for indexed products. Relative to first quarter, 2007, sales of immediates were up 38.8% while indexed and MVA annuity sales dropped 18.1% and 19.1%, respectively.
AIG Annuity led in the bank channel for the sixth straight quarter, generating more than half of participants' quarterly sales. First quarter results for the top ten Study participants were as follows:
Bank Channel Sales
(in thousands)
---------------------
AIG Annuity Insurance Co. (NYSE:AIG) 2,593,553
New York Life 810,673
Genworth Financial Companies 384,329
AEGON/Transamerica (NYSE:AEG) 360,343
Allstate Financial (NYSE:ALL) 269,699
Jackson National Life 169,637
Lincoln Financial Group (NYSE:LNC) 110,565
Protective Life (NYSE:PL) 88,899
Sun Life Financial (NYSE:SLF) 74,109
John Hancock (TSX:MFC) 56,002
All of first quarter's top ten bank channel products were book value annuities. Half were AIG Annuity products. First quarter results include sales of some 117 products sold in financial institutions(4).
Rank Company Name Product Name Product Type
1 AIG Annuity Proprietary Bank Product C Book Value
2 AIG Annuity Flex 5 Book Value
3 New York Life NYL Preferred Fixed Annuity Book Value
4 AIG Annuity Flex 7 Book Value
5 New York Life NYL Single Premium Fixed Annuity Book Value
6 AIG Annuity Proprietary Bank Product B Book Value
7 AIG Annuity Proprietary Bank Product D Book Value
8 AEGON/
Transamerica Capital Builder 2007 Book Value
9 Allstate
Financial Allstate Preferred Performance Book Value
10 Genworth
Financial
Companies SecureLiving Advantage Book Value
"The spread between one- and ten-year Treasuries widened dramatically in first quarter. By March, it was the widest since September, 2004. This gave fixed annuities a rate advantage over bank certificates of deposit, because insurance companies make longer-term investments to back annuities with shorter rate terms. Sales really took off as a result," said Jeremy Alexander, CEO of Beacon Research. "We expect similarly strong bank sales in second quarter because yield curve conditions are similar. Rising rates also will help to boost results."
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.
The Beacon Research logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=509
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.