John Hancock Financial announced Tuesday that its 2007 sales of variable annuities in the bank channel rose 41%, to $1.4 billion.
It was the fifth consecutive year that John Hancock notched record bank sales of variable annuities, and Marc Costantini, the president of John Hancock Variable Annuities, said the company expects at least 40% growth this year despite unfavorable market conditions.
"Our objective is to reach $2 billion in sales in the bank channel this year, and we believe that we can achieve that," he said. "This is a growth market, and we are adding new relationships every day."
Fred Nicholas, the president of Hancock's bank annuities channel, noted that 2007 was the first full year of Hancock's relationship with JPMorgan Chase & Co., and he said sales through Bank of America Corp. "nearly" doubled the 2006 tally.
The bank channel accounted for nearly 16% of Hancock's variable annuity sales, Mr. Nicholas said.
It has "certainly become a big growth driver for our overall sales," he said. "Continuing to add new distribution partners and broadening existing relationships is a priority for us."
Hancock also added Fifth Third Bancorp of Cincinnati to its list of variable annuity distributors.
Mr. Costantini said he does not expect to add any banking relationships in the first half of this year, but Hancock will target a handful of banks in the second half, he said.
"When you look at our distribution of variable annuities, if we could get the same share of the bank channel that we have in other channels, we could be the largest distributor of variable annuities in America, and that is our objective," he said.
Hancock, a Boston unit of Manulife Financial Corp. of Toronto, expanded its lineup of optional guaranteed benefits in October when it added a rider called Principal Returns.
Principal Returns provides an 8% guaranteed withdrawal rate for clients seeking "income now," and for those who do not take withdrawals and are concerned about market exposure, it offers an accumulation benefit feature that provides principal protection while investing in the markets. It is the first Hancock product with an accumulation benefit feature.
Observers said Hancock's goals are aggressive given the state of the market. Mr. Costantini, however, said that, though "the recent market conditions are cause for concern … the strength of variable annuities is that they can successfully provide downside protection."
"This is the time for the variable annuity industry to shine, and as advisers understand the market, sales can improve despite volatile markets," he said. "We are still optimistic about this offering."
