Sales of NBD Bancorp's variable-rate annuity are warming up, four months after its spring introduction.

Retail sales of the product total $14.8 million since April, said Richard Foersterling, a vice president at the Detroit-based banking company.

Though industry experts consider this a modest start, Mr. Foersterling said he anticipates total assets in the annuity will cross the $100 million threshold by the end of next year.

Mr. Foersterling said market research and broker focus groups pointed to consumer demand for an asset allocation approach to annuity investing, which spurred development of the product dubbed Pathmaker.

ITT Hartford Life Insurance Cos., underwriter of more than $4 billion of annuities in 1994, brought the annuity product to market.

NBD and outside brokers will sell it in bank branches in Michigan, Indiana, Illinois, and Ohio. These brokers previously sold Putnam, Franklin-Templeton, and Woodward funds and annuities.

With Pathmaker, investors can allocate assets according to five model portfolios, or can customize their accounts using a combination of the bank's Woodward proprietary funds and offerings from Putnam Mutual Funds Corp.

ITT Hartford sees Pathmaker as a logical step in the industrywide drive to increase fee-based revenue. "We see more and more proprietary programs where the bank is the money manager," said Peter Cummins, ITT Hartford vice president for variable annuity sales.

By wrapping NBD's mutual funds in an annuity, the bank can collect fees and profits on the underlying funds as well as on the annuity itself, he explained.

But squeezing a profit from a good idea is sometimes easier said than done.

"In terms of making money, the bottom line for all these kinds of products is distribution, distribution, and distribution," said David Master, vice president at the Optima Group consultancy.

"What we know of NBD," he said, "they seem to have a lot of focus. And that's pretty smart." When management becomes enamored of a new product to the point of playing down break-even sales thresholds, he said, it spells trouble.

In its next step along the asset allocation continuum, $48.1 billion- asset NBD is working on a wrap account, scheduled to be launched in 1996.

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