Magazine article American Banker

Hancock's Bank Push Paid off in 2000 Annuity Sales

Magazine article American Banker

Hancock's Bank Push Paid off in 2000 Annuity Sales

Article excerpt

Thanks to a product with a long-term-care rider and a bulked-up wholesaling unit, John Hancock Financial Services last year lifted its variable annuity sales through banks to $155 million.

That's a 375% increase from the $32.6 million it sold in 1999.

In addition, about 45% of the company's total annuity sales went through banks, up from 30% a year earlier.

Peter Mawn, senior vice president of John Hancock Financial Institutions Group, the company's bank distribution arm, specifically credited the increase in bank channel sales not just to the increased wholesaler staff but also to the company's Revolution variable annuity, a product with a long-term-care rider. It was issued in September 1999.

"We didn't do a good job" selling annuities through banks before last year, Mr. Mawn said. "We had neglected the variable side of the business, and this product gave us a story to tell."

Information about the percentage of variable annuities the company sold as a result of 1035 exchanges was not available. A 1035 exchange is the tax-free transfer of a contract owner's assets from one insurance company to another.

(John Hancock was not one of the companies fined by the National Association of Securities Dealers for improper and misleading annuity sales tactics. See story, page 2.)

The Revolution annuity is a perfect fit for banks, Mr. Mawn said, since many bank customers are elderly and need such a product for income protection. "We're selling fixed and variable annuities through about 300 banks," he said, "and the long-term-care rider has been a big deal."

Big-bank customers of Hancock, like Wachovia Corp., Regions Financial Corp., and Hibernia Corp., are selling the product.

The long-term-care rider lets a policyholder withdraw money for nursing home and critical-illness care for either the annuity owner or his or her spouse, whether the spouse is named on the annuity or not. …

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