Magazine article American Banker

Safeco: Fixed Annuity Repair Job

Magazine article American Banker

Safeco: Fixed Annuity Repair Job

Article excerpt

A little over a year ago, Safeco's goal was to enter the bank market, and it handily achieved that.

Now, after three quarters of 2002, the Seattle insurer is trying to turn around its slipping fixed annuity sales.

Safeco's fixed-product sales through banks were just under $207 million in the third quarter, a 29% drop from the previous quarter. But Randy Talbot, the president of Safeco Life and Investments, said he is optimistic that sales will rise again as a result of the introduction last summer of a second fixed annuity in the channel.

Safeco Secure was released in late August and has had sales growth each month. "It has a little higher interest rate and a longer time horizon," Mr. Talbot said.

Still available through banks is the company's first fixed annuity, Safeco Select, which does not tie up investors' money for as long as the new product.

Bob Wick, a principal at Cramer, Wick & Associates in Davidson, N.C., called the sales decline "striking" but added that it could have been due to the change in focus to the new product.

"The drop could be part of the normal time it takes for something new to take hold," Mr. Wick said. Safeco could take heart, he said, from the fact it has broken into the bank channel at all.

Meanwhile, Safeco's variable annuity sales remained close to nil in the third quarter. Variable sales were $1.3 million, compared with $4.5 million in the second quarter.

Mike Korthaus, the president of Safeco Financial Institutions Distribution, a division of Safeco Life, said during the third quarter that the company planned on expanding its variable sales next year. …

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