Allstate Financial Group's bank sales unit says a drive to reduce its dependence on fixed annuities paid off in the second quarter, even though its overall sales through banks declined.
Glenbrook Life and Annuity Co., which also does some selling outside of the bank channel, started its "Big Shift" program in May. As a result, it says, its second-quarter bank sales of variable life products jumped 68% from the first quarter, and its bank sales of variable annuities climbed 42%.
The Northbrook, Ill., unit says the increase came from the approximately 50 new bank distribution agreements it has put into place since May 1, when it introduced Ultra, a variable annuity designed for the bank channel. Two other variable annuities, a bonus product and a level-load product, will come out in the fourth quarter, said Rob Shore, Glenbrook's senior vice president of financial institutions.
Glenbrook's overall bank sales still slid 2%, as those of its fixed annuities dropped 6%.
The main reason for the drop was that competing insurers offer fixed annuities with five-year guarantees, Mr. Shore said. The company has such a product "in development," he said, but he would not say when it will be ready for sale.
Still, "we're making good inroads in growing our life and variable annuity sales, something we've been actively trying to do," he said. "We already distribute five fixed annuities through over 100 banks, so we have a phenomenal opportunity to continue the growth of the variable annuity side," he said. "We still have a lot of partners we can sign up to distribute our variable products."
Kenneth Kehrer Associates, a Princeton, N.J., consulting firm, releases a quarterly study on annuity sales through banks. Kenneth Kehrer, president of the firm, said that while Glenbrook's variable annuity growth were surprising, he still expects industrywide sales of fixed annuities to outpace those of variables in the second quarter as in the first.
The firm's first-quarter study showed that fixed annuities outsold variable annuities 61% to 39%. The second-quarter study is scheduled for release in mid-August, and Mr. Kehrer said he expects it to show that variables did not narrow the gap.
Allstate's overall annuity sales numbers reflect what Mr. Kehrer said will prove to have been the second-quarter trend for bank sales. Allstate's total fixed annuity sales rose 17% from the previous quarter, to $443.3 million. Variable annuity sales slid 25%, to $174.2 million. (The numbers include Glenbrook Life sales, but Allstate did not break out the unit's dollar amounts.)
"The fact that they're pushing variable annuities aggressively, and succeeding, is quite impressive," Mr. Kehrer said.
Glenbrook Life is bulking up its other bank variable lines in the right way, he said. "By reengineering the product line, Glenbrook Life is going to be better able to compete in the bank channel," Mr. Kehrer said. "Banks want relationships with providers that carry more than one product, because it becomes a partnership, not just a distribution agreement."