Hartford Life Inc. has set a sort of home run record, becoming the first underwriter to sell more than $1 billion of annuities through banks in a single quarter. It sold $1.1 billion of them that way in the second quarter, 22% more than in the first, mostly thanks to generally strong sales of variable annuities.

Underwriters sold 17% more variables through banks and other channels in the second quarter than in the first, according to Variable Annuities Research Data Service of Marietta, Ga.

Bank sales of annuities from all underwriters rose 18.6%, to $5.1 billion, according Kenneth Kehrer Associates of Princeton, N.J.

Hartford is the dominant player in the bank market. Its sales exceeded the combined total of second-place Nationwide Financial Services and third- place American General Corp.

Hartford made an early commitment to the business, said Mr. Kehrer, the consulting firm's principal.

"In the deep, dark 1980s they were trying to sell variable annuities when no one else thought it was possible through banks," Mr. Kehrer said.

Hartford had its eye on the $1 billion sales mark since the late 1980s, said Bruce Ferris, an assistant vice president. Reaching the goal came from management's dedication to the sector, he said.

"Most important is commitment. We do business with banks big and small and everything in between," Mr. Ferris said. Embracing the whole market was a boon in maintaining shelf space through the merger frenzy, he said.

Mr. Kehrer said Hartford has provided high-quality product, strong wholesaling support, and a name customers know. "Success breeds success," he said.

Hartford tied with American Skandia Life Assurance and Pacific Life for overall excellence in this year's Dalbar survey of 2,200 annuity brokerages. The winners were announced this month.

At $1 billion-asset Busey Bank of Urbana, Ill., Hartford's product is a known and trusted quantity, said Curt Anderson, president of First Busey Securities, the brokerage arm of the bank.

"It's a name that everyone's familiar with, and that helps," Mr. Anderson said. "We really have limited our product line to a very short list."

Mr. Anderson said that Hartford is a solid performer, and that Busey does not spend much time considering less-known competitors. "I just don't like being beat up by insurance wholesalers," he said. "There is always something special about their products."

Mr. Kehrer said one reason the top five underwriters control so much of the market is that banks find it easier to stay with a competent company than redo processing, training, and due diligence for a new underwriter.

And annuity companies are adding to product lines to keep up with competitors trying to edge into the market, he said.

That allows the bank to add new products without looking to other carriers.

Hartford, for instance, just announced the introduction of two no- surrender-charge variable annuities. (There is no penalty for early withdrawal of principal.) American Skandia, Keyport Life Insurance, and Jackson National Life are among the companies that were already offering such products.

"Our belief is that we want to maintain a continuum of products across the landscape of investment needs," Mr. Ferris said.

Though Hartford's early entry gave it a toehold, others joined the top five more recently.

Nationwide has become a big player with banks over the past two years with its Best of America variable annuities that feature multiple money managers. This was a twist that Hartford had not addressed, giving Nationwide a big boost, Mr. Kehrer said.

Though American General Annuity's sales for the quarter were a reflection of the overall slump in fixed annuity sales, its vault into the top ranks was a result of its strategy of allowing banks to be subadvisers for annuities, Mr. Kehrer said.

Those two strategies built American General's bank sales quickly, but the fourth and fifth players, Allstate Life Insurance Co. and Safeco Corp., have built their positions slowly.

For the current quarter, Allstate has gained on the strength of increased fixed annuity sales; Safeco has continued expansion on the back of strong equity index sales.

Despite the movement in recent years, Mr. Kehrer believes it will be increasingly difficult for competitors to make significant headway into the leaders' market share.

"The business is starting to mature now and it's hard to see any of these companies stumbling, but when they do they can be replaced," he said.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.