Its being called the Big Shift at Glenbrook Life and Annuity Co.
Historically, and that includes all the way into this year, 85% of our sales through banks have come from fixed annuities, said Rob Shore, director of the Northbrook, Ill., companys financial institution division. Now were looking to change that.
On May 1, Glenbrook, a member of the Allstate Financial Group, started offering Glenbrook Provider Ultra, the first of three variable annuities designed for the bank channel. The others, a bonus product and a level-load product, are to come out this year.
The idea is to attract customers while holding on to the regulars. Some banks now want to have sales agreements with fewer insurance providers, but Mr. Shore said he believes he is on the right track.
Banks want relationships with [insurers] that have multiple products, he said. In order to accommodate deeper relationships with them, you have to have more bank-designed insurance and annuity products available a more diversified book of business.
The strategy appears to be working. Since Ultras launching, Glenbrook has signed up one or two banks a week, several of them distributors of its fixed annuity products, Mr. Shore said.
The challenge is shifting our focus while staying really good at what weve been good at, and thats fixed annuities, he said.
The insurers new approach makes sense, said Ken Kehrer, president of the Princeton, N.J., consulting firm Kenneth Kehrer Associates.
Banks like to have relationships with providers that offer multiple products because it makes the relationship more of a partnership, he said. Banks also gain some leverage once they offer more than one of an insurers products because the more a bank sells, the more important a client it becomes.
Glenbrook doesnt release its bank sales numbers, but Mr. Shore said the remaining 15% of its bank channel sales come from variable life policies, variable annuities, and single-premium whole life insurance.
In the first quarter, Allstate Financial sold a total of $585 million of annuities through banks, making it the fifth largest distributor through banks, according to Mr. Kehrers ranking of bank annuity sales.
Of that total, $368 million came from fixed annuities and $217 million from variable annuities. Most of the variable annuity sales came from the companys Putnam Allstate Advisor product, Mr. Kehrer said.