Bank sales of fixed annuities are soaring, as a result of a favorable interest rate environment, the stormy equity markets, and new product features, according to insurance and banking executives.

"The interest rate environment has been very supportive of this product," said Mark Crowley, senior vice president of Washington Mutual Investments Inc.

Nationwide second-quarter sales of fixed annuities through banks rose 81% from a year earlier, to $7 billion, according to a survey of insurance companies released last month by Beacon Research Inc. in Evanston, Ill.

Bankers and insurers said the return of a more conventional yield curve early this year has made certificates of deposit rates less attractive and fixed annuities more attractive. They also said a range of recently added features, including interest rate guarantees, have made the annuities an easier sell.

"The flexibility in design has really played well with investors," Jack Mishler, divisional vice president for the Western region of Jackson National Life Insurance Co.'s institutional marketing group, said in an interview last week.

He also said some of his company's products allow customers to withdraw 15% of the account value each year. Jackson National's second-quarter sales of fixed annuities through banks jumped 165% from a year earlier, to $387 million, according to Beacon.

New York Life Insurance Co. had an even more dramatic bounce. Its sales of fixed annuities through the bank channel rose 197%, to $1.35 billion, Beacon reported.

Andy Reiss, national sales manager for New York Life, said that before this year demand for fixed annuities had been "relatively flat" for about three years.

But by January, he said, the stock market had become turbulent, and as the inverted yield curve began to normalize, CD rates that had been high began to fall. "So CD investors, who are living off these products' income, had rate shock," Mr. Reiss said, and many turned to fixed annuities.

Mr. Crowley of Washington Mutual said fixed annuities "erased all that sticker shock."

Improvements in the products over the past few years have persuaded customers to invest more in them; for example, traditional interest rate bonuses — essentially a teaser rate that had confused customers — have become rare.

Also, riders that guarantee customers will not outlive their income have made annuities more appealing, Mr. Crowley said. Withdrawal provisions that allow them to take out a certain portion of the account value each year have been especially attractive, he said.

"A customer might be oriented to having had a CD renew every 90 days for the last 10 years," said Mr. Crowley. "With a longer-term investment like fixed annuities, there might have been a little apprehension in the past."

Mr. Reiss said guaranteed interest rates have helped lure customers to New York Life. One of its popular products guarantees a 6% interest rate for six years — a rate that is a couple of points higher than many CDs, he said.

Such "rate for term" annuities have accounted for more and more of New York Life's sales each month and now exceed half its monthly bank sales, he said.

Mr. Crowley said fixed annuities have also become an attractive option for customers who would have invested in the stock market were it not so volatile. "Don't forget, you're talking about bank customers here," he said. "They have a safety orientation."

This year 28% of the total amount invested by customers through Mr. Crowley's business has been in fixed annuities — a figure he called historically high.

Insurers have been taking steps to capitalize on the demand. Mr. Mishler said Jackson National, a Lansing, Mich., unit of Prudential PLC, started to train bank tellers late last year in how to identify potential annuity customers.

The top seller of fixed annuities through banks in the second quarter was AIG Annuity Insurance Co., with nearly $2 billion, Beacon said. The American International Group Inc. unit's sales rose roughly 17% from a year earlier. Another insurer, Transamerica Corp, saw its second-quarter sales rise more than eightfold, to $1.2 billion, according to Beacon.

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