Magazine article American Banker

Hancock's 4Q Fixed Annuity Sales Up 49%

Magazine article American Banker

Hancock's 4Q Fixed Annuity Sales Up 49%

Article excerpt

Though its overall results were hurt by investments in Enron, John Hancock Financial Services said sales of its fixed annuities through banks was a bright spot in its fourth-quarter earnings picture.

The big Boston insurer said its bank sales of fixed annuities rose 48.8%, to $347.2 million, from the year earlier. For the year, fixed annuities sales in the channel jumped 71.2%, to $1.27 billion.

Kenneth Kehrer, the president of the Kenneth Kehrer Associates consulting firm in Princeton, N.J., which tracks annuity sales through banks, said John Hancock owes a lot of its success to a distribution program called Platform Plus it started last April with Compass Bancshares of Birmingham, Ala.

Compass has agreed to sell Hancock's entire line of insurance and investment products in exchange for a discounted package of marketing and support services from the insurer's third-party marketing subsidiary, Essex Corp. Mr. Kehrer said Compass, as a result, has become a big seller of Hancock annuities.

The insurer has said it intends to expand the program to other banking companies.

It reported a fourth-quarter profit of $102.3 million, down 54.8%, and blamed the drop on $98 million of investment losses, mainly from Enron and its subsidiaries. The company had said in December it would be facing such a hit.

Variable annuities did not do well in the quarter. The company's sales of variable annuities through banks fell 70.8%, to $11.3 million. And sales for the year dropped 61.2%, to $60 million. …

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