Hundreds of banks and thrifts are selling annuities, but a dozen big institutions have gone a step further by creating their own versions of the tax-deferred investment products.

Just how well are they doing in gathering annuity assets? Data prepared for American Banker by Lipper Analytical Services, Summit, N.J., offer some insights on this nascent business.

Lipper collected data from seven institutions that manage annuities - companies that, as of Jan. 31, had been in the business for between seven and 25 months.

Lipper found that these seven controlled a combined total of $412.4 million in annuity assets. And Great Western Financial Corp., 20 months into its sales effort, had singlehandedly amassed a whopping 69% of the total.

No other institution has yet hit the $100 million mark, considered the minimum needed to operate annuities profitably.

Indeed, Fleet Financial Group - which in December 1992 became the first bank to launch a family of variable annuities - is progressing much more slowly than the Chatsworth, Calif., thrift. Its annuity assets totaled $51 million on Jan. 31.

To be sure, the business is in its infancy. Still, Andrew Singer, managing director of Bank Insurance Marketing Research Group, Mamaroneck, N.Y., said he was surprised banks haven't made swifter progress.

Managing annuities "has been kind of a follow-the-leader business," Mr. Singer said. "Maybe some of the banks are regretting it now."

Jon Teall, a spokesman for Lipper, said banks are still learning how to sell proprietary annuities. "Those that can't market extensively will leave the business," he said.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.