NU Online News Service, May 19, 2008, 4:00 p.m. EDT
An increase in fixed annuity volume helped banks increase sales of annuities to $4.7 billion in February, up 68% from the February 2007 total.
Sales of fixed annuities in banks jumped to $2.7 billion, from $1 billion, according to Kehrer-LIMRA, a division of LIMRA International, Windsor, Conn.
Sales of variable annuities in banks increased 6%, to $1.9 billion.
FA sales benefited from a growing spread between the rates on 1-year certificates of deposit and the average bonus new money rates on fixed annuities with 1-year guarantees, according to Kenneth Kehrer, the head of Kehrer-LIMRA.
The yield on a 1-year CD fell to 2.47% in February, while the average rate on 1-year fixed annuities, including any bonus, was 5.22% .
The ratio of bank FA sales to bank VA sales swung to $1.47 to $1 in February, up from $0.55 to $1 in February 2007.