variable annuity product. The insurance firm's annuity arm, New York Life Insurance and Annuity Corp., has contracted with the investment marketing firm Bankmark to sell the annuity, dubbed LifeStages. Two banks are now offering the annuity - Star Banc, a $9.3 billion-asset Cincinnati banking company, which signed on in August, and Columbia Federal Savings Bank, a $1.2 billion-asset thrift in Queens, New York, which came aboard two months later. Before these alliances, New York Life only sold products through traditional agents. The insurer, estimating that the bank channel now accounts for 25% of all annuities sales, felt compelled to join the party. "Its pretty obvious that sales of annuities through banks is very important right now," said David J. Krystel, a vice president in New York Life's individual annuities department. By linking up with Bankmark, based in Morris Plains, N.J., New York Life gains exposure to 85 financial institutions through the marketing firm's 1,500 annuity and mutual-fund salespeople. "We've always relied heavily on the strength of our field force of insurance agents and we'll continue to do so," Mr. Krystel said. "But banks have increased market awareness of the need to save for retirement and increased their share of that market." New York Life hopes that the variable annuity will appeal to conservative investors at banks. The insurance and annuities underwriter spent a couple of years preparing the product and picking Bankmark as its marketer. "We felt they have expertise in initializing and maintaining bank relations," Mr. Krystel said. "We felt they could give us a better start-up than we could on our own." After initially selling LifeStages through its traditional sales force last spring, New York Life now finds that a move into the bank channel is necessary. Bankmark was happy to take on the selling of New York Life's variable annuity because of the high level of consumer product awareness and recognition of the insurer. "This is so revolutionary because it's the first time New York Life is offered through the bank channel," said Bette L. Crosby, senior vice president of Bankmark's marketing operation. "When you introduce LifeStages to a client, you don't have to explain who New York Life is," Ms. Crosby said. Kenneth Kehrer, a Princeton, N.J.-based consultant, estimates that banks sold 15% of variable annuities in 1994 and attributes the success of those products to the name recognition of mutual fund companies that often supply the investment management of these portfolios. "We've found that brand names have been very important in variable annuities sold by banks," Mr. Kehrer said, adding: "Although it's not clear that it's the name brand of the insurance company or the name brand of the mutual funds that are sold inside the variable annuities."

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