Annuities Head List of Insurance Products at Banks, Study Finds
Holliday, Kalen, American Banker
As banks delve into the world of nontraditional products, annuities are emerging as preferred products, according to a recent study by the Financial Institutions Insurance Association.
More than 77% of financial institutions that market insurance offer annuities, the study found.
Credit life insurance was the second-most popular offering (70%), followed by mortgage life insurance (69%).
Other products mentioned by more than half of the institutions surveyed include life, accident and health, automobile, and homeowners insurance.
Designed as a Benchmark
The association's study is designed to provide members with a benchmark for making comparisons with other banks marketing insurance.
The trade group, based in Corte Madera, Calif., based its findings on 135 responses to a survey mailed this spring to financial institutions involved in bank insurance marketing.
About 65% of the responses came from commercial banks, 28% from savings banks, 4% from savings and loans, and the remaining 3% from credit unions and others.
The percentage of respondents with assets of more than $5 billion was 44%. Only 18% of those surveyed has assets of less than $1 billion.
The survey found that by a wide margin, licensed bank agents and third-party agents are the most common distributors of insurance products marketed through banks.
While 96% of the institutions surveyed use this channel, only 53% use direct mail marketing and just over a quarter market through bank cards.
In a breakdown of agent distributors, annuities again fared best. More than three-quarters of respondents offer annuities through bank agents or third-party marketers.
A mere 6% of respondents use direct mail to promote annuities and less than 2% offer annuities to their bank card holders. …