Bank customers have been snapping up annuities, sending sales of the tax-deferred investments soaring, according to a new report.

Sales of fixed and variable annuities by banks totaled $9.3 billion in the first half of 1994, up 29% from the first six months of last year, according to the survey by Kenneth Kehrer & Associates, Princeton, N.J.

The figure includes $6.5 billion of fixed annuities and $2.8 billion of variable annuities.

The consulting firm based its findings on information submitted by 40 insurance companies that channel their products through banks. These 40 companies account for 40% of the annuities sold through banks, Kehrer said.

One reason for the sales increase is that more banks have added annuities to their product lists. Kehrer said a sampling of 48 large banks showed that 80% were selling annuities in the first half of this year, up from less than half a year earlier.

Data collected by federal banking regulators show that roughly 15% of the nation's 10,748 commercial banks were selling annuities at midyear.

Assets placed in annuities are not taxed until they are withdrawn, making the investments a popular vehicle for retirement planning. Fixed annuities provide a set return, much like a certificate of deposit, while the payout on variable annuities is linked to underlying mutual fund investments.

Sales of banks' proprietary variable annuities also contributed to the first-half jump. Volume rose to $211 million from $48 million over the year-ago period, as more banks rolled out their own products.

Currently, about a dozen banks, including Fleet Financial Group, Great Western Financial Corp., and Norwest Corp., manage proprietary annuities.

Among fixed-annuity marketers, insurer Aegon USA retained its top position by marking a 39% increase in sales through banks, to $763 million.

Lincoln National Life vaulted into the No. 2 spot, with $600 million of sales.

And Keyport Insurance Co. and GNA Corp., which are both aligned with investment product marketing firms, captured the third and fourth spots, with $499 million and $414 million of sales.

Hartford Life ranked first among variable-annuity providers, with $711 million of sales from two products, the Hartford Director and Hanford's Putnam Capital Manager.

Allianz Life Insurance Co.'s product, with funds linked to Franklin Resources, is the single most popular variable annuity at banks, with $414 million sold in the first half of this year, the study found.

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