Thanks to a product with a long-term-care rider and a bulked-up wholesaling unit, John Hancock Financial Services last year lifted its variable annuity sales through banks to $155 million.

That’s a 375% increase from the $32.6 million it sold in 1999.

In addition, about 45% of the company’s total annuity sales went through banks, up from 30% a year earlier.

Peter Mawn, senior vice president of John Hancock Financial Institutions Group, the company’s bank distribution arm, specifically credited the increase in bank channel sales not just to the increased wholesaler staff but also to the company’s Revolution variable annuity, a product with a long-term-care rider. It was issued in September 1999.

“We didn’t do a good job” selling annuities through banks before last year, Mr. Mawn said. “We had neglected the variable side of the business, and this product gave us a story to tell.”

Information about the percentage of variable annuities the company sold as a result of 1035 exchanges was not available. A 1035 exchange is the tax-free transfer of a contract owner’s assets from one insurance company to another.

(John Hancock was not one of the companies fined by the National Association of Securities Dealers for improper and misleading annuity sales tactics. See story, page 2.)

The Revolution annuity is a perfect fit for banks, Mr. Mawn said, since many bank customers are elderly and need such a product for income protection. “We’re selling fixed and variable annuities through about 300 banks,” he said, “and the long-term-care rider has been a big deal.”

Big-bank customers of Hancock, like Wachovia Corp., Regions Financial Corp., and Hibernia Corp., are selling the product.

The long-term-care rider lets a policyholder withdraw money for nursing home and critical-illness care for either the annuity owner or his or her spouse, whether the spouse is named on the annuity or not. The surrender charges are waived under these conditions.

About half the variable annuities now in the marketplace have long-term-care waivers, which under certain conditions let owners take money out of the annuity without penalty even if the surrender period has not expired. But few products have long-term-care riders.

“John Hancock is one of only a few long-term-care underwriters still on the scene, so they use that experience to their advantage when packaging an annuity,” said Ken Kehrer, president of Kenneth Kehrer Associates, a Princeton, N.J., bank-insurance consulting firm.

Another reason for the sales growth was Hancock’s addition of wholesalers, both in the field and in-house, early in the year, Mr. Mawn said.

“A year ago we had eight field wholesalers and seven internal wholesalers,” he said. “Now we have 13 in the field and 11 in-house.”

John Hancock’s fourth-quarter variable annuity sales through banks fell 20.4% from the third quarter but jumped 160% from the year before, to $39 million.

Hancock’s fixed annuity sales through banks last year also grew 44.9% from the year earlier, to $742 million. Fourth-quarter sales climbed 15.3% from the third quarter and 71.3% from the year earlier, to $233 million.

The hiring of wholesalers also contributed to sales growth in the fixed annuity category, Mr. Mawn said.

Hancock offers two fixed annuities through banks: Guaranteed Principal Annuity and GPA Care, which also has a long-term-care benefit.

Mr. Mawn said he believes there is still room to grow in annuity sales through the bank channel. “I am not content,” he said. “We’re going to keep moving.”

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