The two-month decline in the stock market is beginning to take some of the steam out of variable annuity sales at banks.

Several bank brokerage executives, as well as an executive with a firm that underwrites these products, said sales had fallen in recent weeks.

"Overall, volume is slowing down somewhat because people are concerned and have a tendency to sit in a money market or certificate of deposit because of this volatility," said Edward Hipp, president of Centura Securities, the brokerage subsidiary of Centura Banks Inc., Rocky Mount, N.C.

Mr. Hipp said Centura's sales of variable annuities are down 10% to 12% from a month ago.

A sustained decline would be a clear setback for the high-flying annuities business. Variable annuity sales have jumped almost 20-fold since 1985, to $87.7 billion last year. In the second quarter, sales of variable annuities through all distribution channels, including banks, reached $27.1 billion, compared with $23 billion in the first quarter. Currently, 12% of all variable annuity sales are through banks.

Though some of the recent drop may reflect a normal slowdown tied to the August vacation season, experts conceded that the stock market decline has not helped matters.

Because variable annuities let investors play the stock market, industry experts have long predicted that a market correction would dampen enthusiasm for these retirement products.

"It's not a precipitous drop, but it is a softening," said Stephen B. Bonner, an executive vice president at Boston-based Keyport Life Insurance, a wholly owned subsidiary of Liberty Financial Cos. "The last two weeks are 8% to 10% below the running average."

At the same time, Mr. Bonner and others contended that customers are expressing more interest in equity-indexed annuities, a type of fixed annuity in which investors get a guaranteed return, plus the potential to reap some, but not all, the benefits of a market upturn.

Banks are selling about $35 of equity-index annuities for every $1,000 worth of variable annuities, according to Kenneth Kehrer, a consultant in Princeton, N.J.

"The market volatility should focus attention on these types of annuities since you're getting a fixed rate of return with the potential for upturn if the market turns around," Mr. Kehrer said.

"For some investors, these annuities are a middle ground" between the conservatism of a fixed annuity and the relative riskiness of a pure variable annuity, said Ronald DiCicco, managing director of Comerica Securities, the brokerage arm of Comerica Inc., Detroit.

Mr. Bonner of Keyport said financial intermediaries that sell his company's annuities, including bank brokerages, are talking up these products as the perfect solution to an uncertain market. "And we're getting more requests for product information from customers," he said.

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