Magazine article American Banker

Nationwide Rides Fixed Annuity Sales Wave

Magazine article American Banker

Nationwide Rides Fixed Annuity Sales Wave

Article excerpt

Matt Riebel says that if anyone had told him three years ago that fixed annuities would outsell variable annuities through banks by a three-to-one ratio, he would not have been nervous, though 95% of his annuity sales that year were of variable products.

Mr. Riebel, the president of Nationwide Financial Institution Distributors Agency Inc., a Nationwide Financial division that distributes annuities and life insurance to banks, said that if his company had not already been "building our fixed annuity business," he would have been "real nervous, but we were already moving in the right direction.

"Historically, though, fixed and variable sales have been relatively split, and that's why we moved into fixed annuities. So if we wanted to be a solid bank partner, we knew we'd have to mirror what they wanted and what they sold."

Now, Nationwide is reaping the benefits of making its fixed annuity push. Its sales of the product were up again in the third quarter, to $481 million, a 19% jump from the second quarter.

"It's been the trend the whole year," Mr. Riebel said. "And the September attacks made people even more jittery. Since then the swing's been even more toward the fixed product."

Nationwide's variable annuity sales through banks tumbled 21%, to $292 million in the third quarter, but Mr. Riebel said he was not frustrated by this. "On a year-to-date basis, we're up 16% in annuity sales overall," he said. "If it's fixed products that sell, fine; if it's variable annuities, that's fine too."

Nationwide's variable annuity sales decline in the quarter exceeded the industry's average, according to Kenneth Kehrer, president of Kenneth Kehrer Associates, a Princeton, N.J., consulting firm that tracks annuity and life insurance sales through banks.

"But they did a good job of diversifying their offerings; you don't see too many companies that have such a balanced mix," Mr. …

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