By the thinnest of margins, Hartford Life edged American General in annuity sales through banks in Kenneth Kehrer Associates' second-quarter sales tally.

Hartford Life, in Simsbury, Conn., sold $1.139 billion in annuities through banks, to $1.083 billion for Houston-based American General Financial Corp., "Banks are our largest distribution channel," accounting for 40% of all annuity sales, said Bruce Ferris, vice president of investment products sales for Hartford Life. "We got involved in bank distribution ahead of most. In 1989, when we sold $15 million through banks, it was still called an alternative distribution channel, so we've come a long way."

American General, however, is closing in on the top spot.

"For six years our goal was to beat Hartford," said Bruce Abrams, executive vice president of sales for American General. "We have had strong growth and I am optimistic that it will continue. Hopefully next quarter we can overtake them."

American General has been chasing Hartford Life since February 1998, when it bought Western National Life Insurance, the nation's leading seller of fixed annuities through financial institutions, and renamed it American General Annuity.

"We're aware of how competitive the marketplace is," Mr. Ferris said. "In 1992 there were around 60 companies selling variable annuities, now it's in excess of 120."

For the first half Hartford had $2.237 billion in annuity sales through banks, against $2.083 billion for American General.

In 1999, Hartford Life had $4.2 billion in annuity sales through the bank channel, No. 1 for the fourth straight year. American General was second with $3.5 billion.

Insurance companies in all sold $4.346 billion in variable annuities and $4.169 billion in fixed annuities through the bank channel in the second quarter, according to the Kehrer report. Variable annuities outsold fixed annuities in the first quarter as well, but fixed annuities outsold variables in the fourth quarter of 1999.

In the second quarter American General sold $228 million in variable annuities, a 107% increase from the year-earlier period.

"American General is a relative newcomer in variable annuities, but they have joint ventures with Bank One and Washington Mutual, so they're trying to grow that line aggressively," said Ken Kehrer, president of the Princeton, N.J., consulting firm that bears his name. "Right now, only 20% of American General's bank sales come from variable annuities, and they need that number to go up if they want to finish first for the year."

Hartford Life faces the same challenge in fixed annuities, of which it sold $217 million in the second quarter.

"The Hartford, like American General, realizes that if they want to finish No. 1 for the year, they're going to have to sell more of what they aren't selling much of right now," Mr. Kehrer said. "That means more fixed annuities for The Hartford and more variable annuities for American General."

Fixed annuities guarantee repayment of invested principal plus interest, while variable annuities, devised as an inflation hedge, pay an amount based on capital appreciation of a portfolio.

Hartford Life remained on top in the second quarter in sales of variable annuities, at $922 million, while American General easily grabbed the top spot in fixed annuities, with $855 million.

In annuity sales overall, the Dutch insurer Aegon NV at $870 million, Columbus, Ohio-based Nationwide Financial at $755 million, and Allstate of Northbrook, Ill., at $712 million rounded out the top five in the Kehrer report.

The GE Cos. was sixth with $517 million in annuities sold through banks.

GE was followed by Keyport at $416 million, Jackson National Life Insurance at $253 million, American Skandia with $233 million, and John Hancock at $209.8 million to complete the top 10.

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