July was a tough month for sales of variable and fixed annuities in banks, but August saw an increase in sales for both products through the bank channel. According to Bank Investment Consultant’s “Variable Annuities Mount a Comeback in Banks,” Howard J. Stock states that variable annuities actually saw the largest increase. Sales increased 14% in August to $1.3 billion, which is even 27% higher than they were in January of this year. The total sales for variable and fixed annuities in August was $2.9 billion. Fixed annuity sales are $1.6 billion currently, after a record high in October. After May sales of $1.5 billion for variable annuities, the highest this year, sales remained low for months until climbing back up recently.
Before the second quarter of 2010 overall annuity sales had not increased for seven consecutive quarters. With a 16% increase from the first to the second quarter this year, it looks like annuity sales numbers are strong and will continue on that path. While they have not yet released the third quarter sales numbers for variable and fixed annuities, market trends may indicate that they will remain high. Since there is still a zero spread between fixed annuities and CDs like equity linked CDs, that can bode well for fixed annuity sales. On the variable annuity side, sales of mutual funds are up and that usually indicates good sales for variable annuities since both provide exposure to the market. It looks to be a good year for variable and fixed annuity sales in the bank channel.