ING U.S. Financial Services has intensified its focus on the bank distribution channel with the addition of 10 wholesalers to its annuities sales team for financial institutions.
The insurer's bank sales efforts will emphasize the suitability of annuities for customers nearing retirement, said John Harline, the senior vice president for financial institutions at ING Annuities, the company's retail annuities division. Atlanta-based ING U.S. is a unit of Holland's ING Group NV.
After securing strong market positions in the independent broker-dealer and wire house sales channels, Mr. Harline said, ING has decided to turn its attention to growth through bank sales.
The wire house and regional bank channels continue "to make significant strides," he said, "and we see significant growth opportunities in 2006 and certainly for some years to come." The bank channel "is one of the areas we have not focused a lot of attention on in years past," he added.
ING's annuity sales team has tightened its focus on suitability issues in light of increased regulatory scrutiny of variable annuity sales, Mr. Harline said.
In a recent investigation of broker-dealers who sell variable annuities, the Securities and Exchange Commission and National Association of Securities Dealers found widespread evidence of unscrupulous practices. The regulators expressed concern that brokers were taking advantage of senior citizens who do not fully understand annuity contracts' nuances.
"We pride ourselves on suitability," Mr. Harline said. "We're focused on building the big picture and identifying areas within the individual client portfolios where a variable annuity would be a good fit."
ING provides suitability training for bank sales representatives and offers educational materials that detail the features of its annuity products, he said.
In June, Harry Stout, the president of ING Annuities, said in a conference call that the company would continue to focus on boosting annuity sales as the baby boomer generation nears retirement. As the company tries to become one of the top five sellers of variable annuities through banks, it will work to increase sales through the top 25 U.S. banks as well as through regional banks, he said then.
ING posted $338 million of annuity sales through banks in the third quarter, ranking 11th among annuity providers in the channel, according to Kenneth Kehrer Associates, a Princeton, N.J., consulting firm. The insurer's sales slipped in the quarter, however, down by $108 million from the second quarter, when ING was ranked No. 9 in bank sales.
ING also said it wants to emphasize helping third-party marketers sell annuities through banks and will deepen the relationships it has with two such companies, one of which is Primevest, an ING sister company. In 2004, when Mr. Stout joined ING from Old Mutual U.S. Life Holdings Inc., the Dutch insurer's U.S. unit created a group of 10 wholesalers dedicated to bank sales.
With the 10 additions, the company's financial institutions sales team has 25 wholesalers. The new ones had previously worked for a niche variable annuity wholesaling unit within ING Annuities that was dissolved in a restructuring.
Since 2004, ING has formed distribution partnerships with Citibank, Bank of America, Wells Fargo, Wachovia, and JPMorgan Chase. By last June, ING Annuities had $52 billion of annuity assets under management and $9.5 billion of annual new premiums.
ING is the second major annuities provider to expand its bank sales team in 2006. Prudential Annuities created a national sales post this month for the wire house and bank channels.
