Bill Waldie of Transamerica Financial Institutions Inc., the unit of Aegon that distributes the Dutch insurers products through banks, says he wont complain about its robust first-quarter fixed annuity sales but is pressing for improvement in its anemic variable annuity performance.
The managing director, product development and industry relations at Transamerica Financial of Minneapolis said the companys success in the bank channel will depend on a better product mix.
Aegon had a 9% increase in fixed annuity sales through banks in the quarter, lifting that products sales to $1.6 billion in the channel. It was one of only two companies to sell more than $1 billion of fixed annuities through banks, the other being New York-based American International Group.
CD rates were still down, and that led to more fixed sales, and were thrilled because we did very well, Mr. Waldie said. Im amazed, and I hope we can keep it going.
Kenneth Kehrer, the president of the consulting firm Kenneth Kehrer Associates in Princeton, N.J., said Aegons success in the bank channel came largely because its rates were above the industry average. Kehrer Associates data showed that the average bonus fixed annuity in February had a 5.62% interest rate, while Aegons bonus product offered a 5.75% rate.
Though its fixed sales continued to soar, Aegons variable annuity business remained relatively nonexistent in the bank marketplace during the quarter. It sold $100 million of variable annuities in the years first three months.
The first-quarter results were about what I expected, but we know we need a better balance, Mr. Waldie said, and remember you can make money on both. No, Im not happy with the split. With the variable market being down, this is an opportunity for us to get into the business because its going to come back up and we want to be there.
To get there, Aegon has begun what Mr. Waldie called May Madness back in March when the campaign was planned. The aggressive push of Aegon variable annuities in the bank channel is targeted to produce a 60% sales increase in 2002 from the 2001 volume. The marketing campaign is only a week old, so it is too early to judge its success, but Mr. Waldie said its importance is not misunderstood by anyone at Aegon.
There are banks that want distribution agreements with companies that offer both kinds of annuity, Mr. Waldie said. Were doing that, and were also pushing single-premium life insurance. But I want the world to know we have variable annuities.
He added that the variable annuity push would do more than strengthen current bank partnerships. We want to add banks as well, he said. This is a way for us to get into more banks.
