In March of last year John Hancock Financial Services began to put more muscle into its bank channel sales efforts.
And though Hancock, like other bank distributors, saw its bank variable annuity sales fall precipitously during the first half of the year, bank sales of all its products still rose 42% from last year.
Hancock has also risen in the rankings of insurers that sell annuities through banks. In the second quarter of 2000 it was 10th; a year later it came in eighth.
Tim Waterworth, the vice president of the financial institutions group, acknowledges that the increases were largely from its fixed annuity sales but says that some also came from changes he helped make over the past year.
Since Mr. Waterworth came to Hancock in March 2000 from Fidelity he has hired at least four additional wholesalers to get more sales agreements with banks and has launched Platform Plus, a turnkey program designed to sell John Hancocks insurance and mutual fund products through bank branches.
The first and so far only Platform Plus client, Birmingham, Ala.-based Compass Bancshares, has been one of Hancocks fastest growing accounts since it launched the program in April.
The program combines Hancocks products with service and marketing support from New York-based Essex Corp., a marketer Hancock bought in 1999.
Under Platform Plus, Compass sells all of Hancocks mutual funds, annuities, life insurance, and long-term care insurance through its 341 branches in seven states. Compass also gets marketing and sales materials, phone support, and training for its platform reps from Essex.
Were looking for a lot more agreements like the Compass deal, Mr. Waterworth said. Were very pleased with that agreement.
But Hancocks variable annuity sales through bank channels have been suffering since the first quarter this year. Those sales dropped 56% in the first quarter, to $17.7 million, from the previous quarter, according to Mr. Waterworth. Second-quarter sales, he said, were even lower $16.6 million.
Mr. Waterworth, however, said he is not discouraged. Three variable annuity proprietary agreements with large banks are in various stages of development, he said. Were going to grow the variable annuity sales, despite the fact that sales have been down because of the market, he said.
He expressed optimism that sales from these agreements will be reflected in the fourth-quarter figures. Investors are sitting on the sidelines, but that doesnt mean were not going to be aggressive in building variable sales, Mr. Waterworth said.
Hancocks second-quarter bank fixed annuity sales were flat, at $281.7 million, a 1% drop from the first quarter, Mr. Waterworth said. He chalked that up to the companys decision to cut the interest rate on the fixed annuities to improve yield. Fixed annuity sales through banks in the second quarter were up 64% from the year earlier.
The large jump in bank-sold fixed annuities comes from Hancocks increased commitment to the bank channel as well as a swing toward fixed annuities by investors, Mr. Waterworth said.
With more wholesalers, banks also are saying they have better coverage from Hancock, Mr. Waterworth said. I had [bank] program managers coming up to me to let me know we didnt have enough wholesale coverage. I dont hear that complaint anymore, he said. He still intends to add wholesalers, he said.
John Hall, an analyst at Prudential Financial in New York, said Hancock has succeeded in expanding distribution in all its products, including annuities, long-term care, and life insurance.
Theyve evolved beyond their traditional channels, Mr. Hall said.
