New York Life Insurance Co. says a new team of retirement specialists will give bank sales of its Lifetime Income Annuities a big lift.
"Sales are going to increase dramatically," said Andrew Reiss, a vice president and the national sales manager for New York Life's bank channel. "Not 10% a year, substantially higher. We anticipate nearly doubling the business year over year."
The company's Lifetime Income Annuities, which offer a guaranteed income throughout retirement, is the best-selling product of its type through banks, according to Kehrer-Limra, a company that tracks the insurance industry. It led the pack at the end of the third quarter with 28% market share.
Mr. Reiss would not give a recent dollar figure for sales of these annuities, but New York Life has said their sales rose 152%, to $290 million, in 2004 after it added extra features. Last year the products' sales rose 51%, to $439 million.
New York Life plans to add four retirement income specialists to help improve sales through banks of the Lifetime Income Annuities.
The plan is for the specialists to school bank sales reps about retirement income planning and share strategies for conducting seminars and reaching lucrative clients.
"This is the kind of product where education and training for the financial rep is critical," Mr. Reiss said. "Someone is not going to go into a bank today and say 'I want one of those immediate fixed annuities' - the marketplace is simply not there yet."
Providing such support is critical for insurers plying the bank distribution channel, said Craig Weber, a senior analyst at the Boston research firm Celent.
Banks may be able to offer annuities from many carriers, but often end up turning to one or two of them for most of their business, Mr. Weber said. The insurers that snag and hold onto that coveted shelf space are the ones that understand the bank culture and know how to support its brokers, he said.
That is where the retirement specialists come in, Mr. Reiss said. New York Life has 20 bank wholesalers. Its first retirement income specialists started late last year, and the team was complete by the end of October of this year, Mr. Reiss said.
Immediate annuities are a far different animal from the variable annuities that in recent years have been a popular, if controversial, way to accumulate assets for retirement. Immediate annuities are fixed-return products used to spread accumulated assets over the duration of a person's retirement.
Strong ratings from Standard & Poor's, Moody's, Fitch, and A.M. Best have helped New York Life make inroads in bank sales, Mr. Weber said. Such ratings are critical to assuring customers that the company will be able to follow through on its obligations, he said.
But because the top tier of insurance carriers have solid ratings, and because many have developed their own versions of guaranteed income annuities, name recognition becomes crucial for sales, Mr. Weber said.
New York Life started focusing more on retirement income a year ago. In November 2005 it hired a Massachusetts Mutual Life Insurance Co. veteran, Paul Pasteris, as the first chief of its retirement income business.
New York Life's rivals in the bank marketplace include Hartford Financial Services Group. In March the Simsbury, Conn., company rolled out its Income Security annuity, which is designed to ensure a consistent income over the lifetime of its owner.
