BB&T Corp. is getting into the proprietary variable annuity business.
The Winston-Salem, N.C.-based bank recently rolled out a proprietary variable annuity and is exploring the launch of a proprietary fixed annuity product in early 1998.
The variable product, dubbed BB&T Director, was launched last summer and is available through BB&T Investment Services Inc. It is issued by Hartford Life Insurance Co. and marks the bank's first stab at proprietary annuities, said Trip Purcell, a senior vice president at BB&T. The bank already sold annuities from other sources.
The desire to get into the business is driven partly by an increase in the popularity of annuities among investors, coupled with BB&T's wish to offer a "full menu" of products, said Mr. Purcell.
"Particularly variable annuities have gained a lot in popularity," he said. If interest rates increase, higher demand for fixed annuities could follow suit, he added.
Even if interest rates were to decline, the bank would likely go ahead with fixed annuities to complement its investment product group, Mr. Purcell said.
BB&T has yet to choose an insurance company to underwrite the proprietary fixed-rate product, Mr. Purcell said, adding that the bank is looking at a number of insurers and that "Hartford would be a possibility." Insurers have been more willing to form partnerships with banks in recent years, which makes it easier to find an underwriter, Mr. Purcell said.
The variable product, which is valued daily, has been "pretty popular," he said. It is designed to reflect the performance of the stock market and tracks the performance of 13 mutual funds.
"All the funds that there were in the Hartford Director product, as well as one of our own funds, are in there," said Mr. Purcell. BB&T's own fund is called BB&T Growth and Income; the other 12 are Hartford funds.
The bank plans to launch a direct-mail campaign for the variable-rate product early in 1998, Mr. Purcell said.
