BISRA: Annuity Sales in Banks Fell 10 Percent in First Quarter

Study Finds Drop in Sales of Fixed Annuities Led the Downturn

WINDSOR, Conn., June 18, 2015 — BISRA today announced that annuity sales in banks fell 10 percent in the first quarter of 2015, and a decline in the sales of fixed annuities was a major factor.

“Sales of variable annuities in the bank channel grew 5 percent, but the increase was not enough to compensate for the bank channel’s drop in fixed annuity sales,” said Dr. Betty Moon, managing director, Bank Insurance and Securities Research Associates (BISRA), a collaborative effort between the Bank Insurance and Securities Association (BISA) and LIMRA.

Fixed annuity sales were down 22 percent in banks in the first quarter, compared with prior year’s first quarter; yet sales levels remained steady with results from the fourth quarter of 2014. For the insurance sales industry as a whole, sales of fixed annuities dropped 10 percent in the first quarter, matching the experience of the banking industry’s programs. BISRA has found that sales of fixed annuities are especially susceptible to specific market conditions.

“The interest rate environment continues to be challenging, and fixed annuity production continues to be highly sensitive to such an environment,” said Dr. Moon. “That said, the decline experienced over the past four consecutive quarters seems to have subsided in the first three months of 2015.”

Within the fixed category for annuities, sales of indexed annuities grew 3 percent for the greater industry while falling 8 percent in the bank channel. The BISRA study found that annuity sales in banks totaled $8.6 billion in the first quarter.

LIMRA has also announced results from the BISRA 2014 Annual Report, which found total annuity sales through banks reached $36.8 billion last year, a 6 percent increase from 2013.

“A strong first half of 2014 for fixed annuity sales was a key driver in the results experienced last year,” said Dr. Moon.

Among other key findings, the BISRA 2014 Annual Report said income annuity sales at banks reached new highs in 2014, and indexed annuity sales at banks continued to set records. Banks have been second only to the independent channel for indexed annuity sales for seven years.

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LIMRA Contacts

Catherine Theroux, 860-285-7787, ctheroux@limra.com
Mark Morris, 860-285-7875, mmorris@limra.com

About BISRA

Bank Insurance and Securities Research Associates (BISRA) is a collaborative effort between the Bank Insurance and Securities Association (BISA) and LIMRA. Established in 2012, BISRA provides in-depth research and business intelligence in the banking and credit union space. In addition to the research and other performance measurement and benchmarking tools, BISRA hosts a series of exclusive strategic summits for executives to learn about industry trends, share best practices and discuss evolving issues and current challenges. For more information about BISRA, please visit: www.bisra.com.

About BISA

The Bank Insurance & Securities Association is the leading financial services industry association dedicated to serving those responsible for the marketing, sales and distribution of securities, insurance and other financial products and advisory services through the bank channel.

About LIMRA

LIMRA, a worldwide research, learning and development organization, is the trusted source of industry knowledge, helping more than 850 insurance and financial services companies in 64 countries. Visit LIMRA at www.limra.com.