Magazine article American Banker

Jackson National 3Q Variable Annuity Sales Boomed

Magazine article American Banker

Jackson National 3Q Variable Annuity Sales Boomed

Article excerpt

Jackson National Life Insurance Co. had a 125% increase in variable annuity sales through banks in the third quarter, according to a bank channel executive at the Lansing, Mich., company.

Jackson National, the main U.S. unit of he British insurer Prudential PLC, had $208 million of variable annuity sales in banks last quarter, said Bradley J. Powell, the president of its institutional marketing group.

"I think we're seeing the interest in the stock market for retail customers go up," Mr. Powell said, and accordingly, investors' interest in variable annuities has revived. "Conservative aspects of our variable annuity products, like fixed accounts, are also helping increase variable annuity sales," he said.

The fixed buckets within variable annuities are buoying variable annuity sales industrywide, said Robert Wick, the president of the bank-insurance firm RVW Consulting Inc. in Davidson, N.C.

"You will generally get a better rate in the fixed buckets of variable annuities than you can in a fixed annuity," Mr. Wick said. "Factor in the compensation differences between variable and fixed annuities right now, and the VA seems to be a more attractive product to everyone involved."

At Jackson National, about one-third of all money going into variable annuities sold by banks was put in fixed buckets, Mr. Powell said. The proportion was higher, though, when all distribution channels were counted.

Though bank variable annuity sales were up, low interest rates helped sink Jackson's fixed annuity sales in the channel. They fell 78%, to $159 million.

"We're seeing a lot of players backing out of the fixed annuity market because margins are compressed," Mr. Powell said. "We didn't consciously pull away," but the company priced its fixed annuity to meet spreads, thus making it less enticing to investors, he said. …

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