Bank sales of fixed and variable annuities rose 4% in the first quarter, but banks' share of the annuity market slipped 2.2 percentage points, to 15.6%, according to a survey by Kenneth Kehrer Associates in Princeton, N.J.

The Kehrer survey of the 38 insurance company groups that sell through banks showed annuity sales through banks rose $300 million in the first quarter, to $7.6 billion. Variable annuity premiums were up 11%, offsetting a 2% drop in fixed annuity sales. Banks sold $3.9 billion of variable annuities and $3.7 billion of fixed annuities in the quarter.

Kenneth Kehrer, president of the consulting company, said he believes annuity sales have kept rising this quarter, though the period of rapid growth is over now that most banks are offering the product.

"There are still an undetermined number of community banks that aren't selling annuities yet," Mr. Kehrer said. "They'll start selling it soon, or they'll be purchased by larger banks that already sell" the product.

Banks' share of the annuity market fell mainly because mutual fund sales climbed rapidly during the bull market of most of the first quarter, Mr. Kehrer said. "Mutual funds had dropped in market share for three straight quarters, but conservative investors went back into mutual funds," he said.

Banks' market share of variable annuity sales slipped by 0.6 of a percentage point, to 11.2%. Their share of the fixed annuities market dipped to 27%, from a high-water mark of 33%.

"Another reason why the banks' fixed annuity market share fell is because independent agents don't sell mutual funds but do offer fixed annuities," Mr. Kehrer said.

The survey, which has been conducted each quarter since the first quarter of 1997, shows that annuity sales through banks have risen ever since the fourth quarter of 1998.

The largest jump in total annuity sales came in the second quarter of 1999, when sales rose to $6.8 billion, from $5.5 billion in the preceding quarter.

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